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On the eve of the first Senate confirmation hearing to consider the nomination of Rep. Christopher Cox, R-Calif., as head of the Securities and Exchange Commission, investor advocates are raising concerns over his fitness to serve as chairman. Public Citizen, a Washington-based consumer advocacy and lobbying group, issued a report Monday that said, “The anti-investor record of Rep. Christopher Cox … should disqualify him from leading the agency.” Cox was nominated last month by President George W. Bush to replace William Donaldson, who resigned June 30 as the nation’s top market regulator. Public Citizen notes in its report that out of 22 key votes on major legislation in the securities industry Cox supported investors only 4.5 percent of the time. Including less controversial issues, the group found Cox voted with investors only about 22.2 percent of the time. The group is also critical of Cox’s lukewarm support for the Sarbanes-Oxley Act of 2002, the sweeping corporate reform package adopted at the height of the nation’s biggest accounting scandals. Cox voted against amendments that would have strengthened a House version of the bill, the report states, and he was absent for more than half the votes when the legislation was being considered by the House Financial Services Committee. Cox spokesman James Freeman declined to comment on the report. Organized labor groups also have made known their displeasure with Cox’s appointment. The International Brotherhood of Electrical Workers, with about $40 billion of pension assets, wrote in a letter to members of the Senate Banking Committee that “Rep. Cox’s past positions on issues of corporate accountability, investor protection and executive compensation are fundamentally opposed to the interests of investors, and make him ill-suited for the job.” The Service Employees International Union, with 1.8 million members and $1.2 trillion of assets, also sent a letter saying Cox’s record on key issues of governance and investor rights “did not inspire confidence.” While some Democrats, unions and investor advocates are not opposing Cox’s nomination, they are concerned he may try to roll back some rule-making initiatives. It is expected that Cox will be questioned at today’s hearing on issues like the controversial �404 of the Sarbanes-Oxley Act, which governs financial reporting, and the rule requiring firms to count employee stock options as a routine business expense. Cox opposed stricter accounting rules for options, and he came head to head with the Financial Accounting Standards Board, which is overseen by the SEC, on merger accounting issues. The banking committee will consider the Cox nomination along with those of two Democrats: incumbent SEC Commissioner Roel Campos and SEC staff member Annette Nazareth. Campos, a former government prosecutor from Texas, has been a commissioner at the SEC for three years. He is being renominated for a term that would run to June 2010. Nazareth has been director of the SEC Division of Market Regulation since 1999. She is being nominated to fill out a term being vacated by Commissioner Harvey Goldschmid that will expire in June 2007. Copyright �2005 TDD, LLC. All rights reserved.

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