William H. Donaldson: Difference between revisions
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Addressing BLP dispute. A bio is not the place for this. The net capital rule article is however, and it's already largely discussed there. Moving to net cap talk page |
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Donaldson is a [[chartered financial analyst]] (CFA) and has received a number of honorary degrees. Donaldson is the father of three children. He is married to Jane Phillips Donaldson. |
Donaldson is a [[chartered financial analyst]] (CFA) and has received a number of honorary degrees. Donaldson is the father of three children. He is married to Jane Phillips Donaldson. |
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==Donaldson and capital requirements== |
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As Chairman, Donaldson presided over the meeting at the [[U.S. Securities and Exchange Commission|SEC]] on April 28, 2004, that was held at the request of the major [[Wall Street]] [[investment bank|investment houses]], including [[Goldman Sachs]], then headed by future [[Treasury Secretary]] [[Henry M. Paulson, Jr.]] The firms requested that the [[U.S. Securities and Exchange Commission|SEC]] approve an alternative to the so-called "[[net capital rule]]", or responsibility to hold [[Capital (finance)|regulatory capital]] in their [[brokerage]] units. They also wanted to avoid [[European Union]] regulation of the entire investment banking conglomerates, since the [[European Union|EU]] had agreed not to scrutinize foreign firms at the consolidated level if the [[U.S. Securities and Exchange Commission|SEC]] were to do so instead. |
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A 1999 law, however, put investment bank [[holding company|holding companies]], the consolidated groups of their hundreds of subsidiaries, beyond [[U.S. Securities and Exchange Commission|SEC]] oversight. The [[investment bank|investment banks]] therefore lobbied for a decision that would allow "voluntary" regulation at the [[holding company]] level by the [[U.S. Securities and Exchange Commission|SEC]]. |
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The [[U.S. Securities and Exchange Commission|Commission]] under Donaldson voted unanimously to change the regulation as the [[investment bank|investment banks]] requested. Under the final rules the large investment banks were "subject to substantially fewer requirements," according to the adopting release.<ref>http://sec.gov/rules/final/34-49830.htm</ref> |
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In the 2004 rulemaking, the [[U.S. Securities and Exchange Commission|Commission]] under Donaldson decided to rely on the firms’ own computer models for determining the riskiness of investments, "essentially outsourcing the job of monitoring risk to the banks themselves."<ref name="NYT0127">[http://www.nytimes.com/2008/10/03/business/03sec.html "Stephen Labaton, "Agency’s ’04 Rule Let Banks Pile Up New Debt"] [[New York Times]], October 2, 2008</ref> Donaldson and the other Commissioners who voted for the rule change were aware of the risks at the time, as indicated by the comment at the April 28, 2004 meeting by Commissioner [[Harvey Goldschmid]]. "If anything goes wrong," said Goldschmid, who supported Donaldson in voting for the proposal, "it's going to be an awfully big mess."<ref>US SEC Clears New Net-Capital Rules For Brokerages," Reuters, April 28, 2004, http://securities.stanford.edu/news-archive/2004/20040428_Headline08_Drawbaugh.htm</ref> A report by the [[U.S. Securities and Exchange Commission|SEC]] Office of the [[Inspector General]]<ref>[http://www.sec.gov/about/oig/audit/2008/446-a.pdf "SEC's Overight of Bear Stearns and Related Entities: Consolidated Supervised Entity Program," Office of the Inspector General, United States Securities and Exchange Commission 446-a], September 25, 2008</ref><ref>[http://www.sec.gov/about/oig/audit/2008/446-b.pdf "SEC's Oversight of Bear Stearns and Related Entities: Broker-Dealer Risk Assessment Program," Office of the Inspector General, United States Securities and Exchange Commission 446-b], September 25 2008.</ref> after the near-failure of [[Bear Stearns]] stated that the standards the [[U.S. Securities and Exchange Commission|Commission]] adopted under Donaldson in [[2004]] were inadequate to warn of the firm's impending crisis. |
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The only briefing the [[U.S. Securities and Exchange Commission|Commission]] received that criticized the regulatory change prior to its adoption came from Leonard D. Bole, an information technology consultant, who found the risk models used by investors no better in [[2004]] than during the [[1998]] failure and bailout of the hedge fund, [[Long-Term Capital Management]]. At the time of the rulemaking the [[U.S. Securities and Exchange Commission|SEC]] took no action to contact Bole to follow up on the briefing that he submitted.<ref name="NYT0127"/> |
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==References== |
==References== |
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Revision as of 15:08, 4 January 2010
 | This article's factual accuracy is disputed. (October 2009) |
William H. Donaldson | |
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| Born | June 2, 1931 |
| Alma mater | Yale |
| Occupation | former SEC chairman (retired) |
| Known for | founded DLJ, founded (and dean of) the Yale School of Management, served as Under Secretary of State for International Security Affairs in the Nixon Administration |
William Henry Donaldson (born June 2, 1931 in Buffalo, New York, USA) was the 27th Chairman of the U.S. Securities and Exchange Commission (SEC), serving from February 2003 to June 2005. He served as Under Secretary of State for International Security Affairs in the Nixon Administration, as a special adviser to Vice President Nelson Rockefeller, Chairman and CEO of the New York Stock Exchange, and Chairman, President and CEO of Aetna. Donaldson founded Donaldson, Lufkin & Jenrette. Donaldson attended both Yale University (B.A. 1953) and Harvard University (M.B.A. 1958). He was Chairman of the Carnegie Endowment for International Peace from 1999 to 2003. Donaldson returned to Yale and founded the Yale School of Management where he served as dean and professor of management studies. He also served in the United States Marine Corps.[1]
While he was a senior at Yale, he joined its Skull and Bones secret society.[2][3]
Donaldson is a chartered financial analyst (CFA) and has received a number of honorary degrees. Donaldson is the father of three children. He is married to Jane Phillips Donaldson.
References
- ^ Official biography at SEC website.
- ^ *Robbins, Alexandra (2002). Secrets of the Tomb: Skull and Bones, the Ivy League, and the Hidden Paths of Power. Boston: Little, Brown. pp. 166, 173. ISBN 0-316-72091-7.
- ^ "Skull And Bones: Secret Yale Society Includes America's Power Elite", CBS News, June 13, 2004
Chairmen of the United States Securities and Exchange Commission | ||
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| Under Secretary of State for International Security Affairs 1972–1993 |  | |
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| Under Secretary of State for Arms Control and International Security Affairs 1993–present | ||