Sen. John McCain stated in a speech in Iowa today that if he was president today, he would fire SEC Chairman Christopher Cox. According to excerpts from his speech in the WSJ’s Washington Wire, McCain says that “the chairman of the SEC serves at the appointment of the president and has betrayed the public’s trust. If I were president today, I would fire him…. The primary regulator of Wall Street, the Securities and Exchange Commission (SEC) kept in place trading rules that let speculators and hedge funds turn our markets into a casino.” McCain adds “[t]hey allowed naked short selling–which simply means that you can sell stock without ever owning it. They eliminated last year the uptick rule that has protected investors for 70 years. Speculators pounded the shares of even good companies into the ground.”
ABC News points out that McCain could not fire Cox even if he wanted to, however, because “while the president nominates and the Senate confirms the SEC chair, a commissioner of an independent regulatory commission cannot be removed by the president.” In 1935, President Franklin Delano Roosevelt fired a member of the Federal Trade Commission, an act which the Supreme Court later ruled was unconstitutional.
Asked how McCain would “fire” Cox in the absence of such power, the McCain campaign pointed to former SEC Chairman Harvey Pitt, who resigned in 2002 after losing the confidence of the Bush administration. “Not only is there historical precedent for SEC Chairs to be removed, the President of the United States always reserves the right to request the resignation of an appointee and maintain the customary expectation that it will be delivered,” said McCain spokesperson Tucker Bounds.