Consumer Advocates Criticize SEC Nominees; Call for Strong Shareholder Advocate to Strengthen Economy
Santa Monica -- Consumer advocates called on President Bush today to help restore consumer confidence in the corporate scandal-ridden marketplace by nominating a proven shareholder and consumer advocate, not another corporate executive, to head the Securities and Exchange Commission (SEC). Advocates with the Foundation for Taxpayer and Consumer Rights (FTCR), a non-profit, non-partisan organization, criticized recently revealed candidates who do not fit the bill, including two nominees with executive ties to corporations currently under investigation by the SEC.
"President Bush proposes to replace the fox in the henhouse with a coyote," said Carmen Balber, consumer advocate with FTCR. "This is not the time for the President to pay back campaign contributors and corporate cronies. America needs a strong shareholder and consumer advocate at the helm of the SEC who will be quick to take corporate crooks to task, keep investor and public interests in the forefront, and help the nation weather the storm of corporate malfeasance."
The group said that the national economic downturn, and the crisis in consumer and shareholder confidence, are attributable in large part to the actions of corporate executives. Yet the President continues to rely on the same pool of corporate candidates to staff his Administration. The SEC, the agency specifically charged with corporate regulation, is the last place this trend should be repeated, said FTCR.
The list of SEC nominees includes Stephen Hammerman, ex-vice chairman of Merrill Lynch & Co., the investment-banking firm from which he resigned in April. Merrill Lynch has recently paid $100 million to settle charges of misleading investors brought by the New York state attorney general. The corporation is also under investigation by the SEC for the same offense.
T. Timothy Ryan Jr., another candidate put forward by the White House, is a managing director for J.P. Morgan Chase & Co. J.P. Morgan is currently embroiled in a lawsuit in which insurers allege that the corporation engaged in false round-trip gas trades in an effort to fraudulently boost the Enron Corporation's falling revenues shortly before it declared bankruptcy. J.P. Morgan is also subject to an SEC investigation alleging the company's analysts intentionally misled investors.
"The President's SEC candidates are corporate insiders who are unlikely to stand up to errant corporations," charged Balber. "Following Harvey Pitt's resignation in disgrace, it would be unconscionable for the President to propose any but a strong corporate regulator to take his place."