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Securities and Exchange Commission Chairman William Donaldson will resign on June 30, the agency announced Wednesday. Donaldson, who has served as commission chairman since February 2003, has been criticized by business groups for his inability to see eye-to-eye on some key issues with the two other Republican agency commissioners, Cynthia Glassman and Paul Atkins. While commissioners voted unanimously on thousands of issues, Donaldson and the two Republican commissioners were at odds over regulations that require hedge fund managers to register with the SEC and open their books up to periodic inspections. Donaldson and the two other Republicans on the commission were also at odds over a long-stagnating proposal that would allow shareholders in certain circumstances to nominate director candidates to corporate boards. The SEC has been having some trouble lately, which some observers say may have contributed to Donaldson’s resignation. The SEC announced May 26 that it had an unexpected $48 million budget shortfall. The Government Accountability Office audit reported that the SEC did not institute some of the same financial controls it requires of the public companies in reviews. Donaldson, who turns 74 today, became the 27th chairman of the SEC, amid a crisis of investor confidence caused by several high-profile corporate scandals. Indeed, Donaldson’s predecessor, Harvey Pitt, had resigned under fire three months earlier when it was revealed that he had not disclosed questions about his choice to head the new Public Company Accounting Oversight Board. “When I assumed the Chairmanship of the Securities and Exchange Commission roughly two and one-half years ago, public confidence was severely undermined, reflecting the corporate and financial scandals that had shaken the nation,” Donaldson said in a prepared statement Wednesday. “Thanks to the dedicated efforts of the many professionals who serve at the SEC, this period has represented an extraordinarily active and effective time for the Agency. It may well be remembered as the most consequential and productive period in the Commission’s history since its founding in 1934.” Attempting to reassure investors, the agency under Donaldson has focused on regulations aimed at improving corporate governance, ethics and financial disclosure. Before arriving at the SEC Donaldson was founder, chairman and CEO of investment bank Donaldson, Lufkin & Jenrette; chairman and CEO of the New York Stock Exchange; chairman, president and CEO of insurer Aetna Inc.; and chairman and CEO of Donaldson Enterprises, Inc. Copyright �2005 TDD, LLC. All rights reserved.

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