WEST PALM BEACH, FL (HEDGECO.NET) – The US Securities and Exchange Commission has been caught up in various controversies, one led to the resignation of former SEC Chairman Harvey Pitts. Even afterMr. Pitt�s resignation, the problems of the SEC seem to be continuing under the current Chairman William Donaldson, who has relentlessly worked to bring the US hedge fund industry under theregulatory oversight of the SEC.
While the vote of the SEC Commissioners on hedge fund regulation draws near, the SEC Commissioners seem to be bitterly divided over the hedge fund regulation controversy. According to published reports, Donaldson, along with two democratic members, still support the regulation initiates, while two republican members remain opposed to the proposal.
On the issue of the nomination of company directors, the SEC has maintained that shareholders be allowed to nominate company directors, however that issue has not been resolved one way or another. Such unresolved issues have cast a shadow of doubt in the leadership potentials of William Donaldson himself.
Hedge fund watchdog groups have criticized the hedge fund regulation initiative and hedge fund industry analysts who argue that hedge funds have largely done a good job of self-regulation, and that transparency has improved over the years. In addition to the objection of hedge fund regulation proposals by prominent leaders of the US financial markets such the Federal Reserve Chairman Alan Greenspan, the hedge fund regulation initiative seems to be encountering significant resistance.
It is unclear whether Donaldson will survive as the leader of the SEC, amidst the current controversy, as the US presidential election draws nearer. In a recent report, Joel Seligman, dean of the Washington University School of Law, speaking about this issue, suggested that Chairman Donaldson might resign as the SEC Chairman even if George Bush wins the November elections. Seligman said Mr. Donaldson�s �ability to smooth over compromise seems to have eroded.� He added, “You have a period just before an election and there is uncertainty as to who will win and what Donaldson’s long-term plans are.”
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: [email protected]
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