Investment banker picked to become SEC chairman

By Marcy Gordon
Associated Press

WASHINGTON — William H. Donaldson, an investment banker with ties to Wall Street and the Bush family, was chosen by President Bush yesterday as the new chairman of the besieged Securities and Exchange Commission. He pledged to work to restore confidence in the markets and corporate America.

Bush said Donaldson's mission would be "to vigorously enforce our nation's laws against corporate corruption and to uphold the highest standards of integrity in the securities markets."

Bush said restoring confidence in the markets was essential to the country's economic well-being. Donaldson said, "It's time for all of us to pull up our socks."

He noted the numerous cases of corporate wrongdoing in the past year and said he would deal with them swiftly.

Donaldson, 71, was chairman of the New York Stock Exchange from 1990-95 and a co-founder of Donaldson, Lufkin & Jenrette, an investment banking firm.

He clashed in the early '90s with then-SEC Chairman Richard Breeden on whether to bend accounting standards to attract foreign companies to the stock exchange.

Senate confirmation of Don-aldson appears assured.

Democrats and consumer advocates appeared to be keeping an open mind on the question of whether a Wall Street figure should be named to police investment firms and corporate America.

Senate Banking Committee Chairman Paul Sarbanes, D-Md., who will lose that position next month when the Republicans regain control of the Senate, said he looked forward to "a thorough confirmation process in which Mr. Donaldson's record will be carefully examined and his views on the challenges facing the SEC fully reviewed."