Chairman Cohen had led the SEC through some of its most difficult years, employing political skill and legal acumen to rebuild the intellectual and political foundations of the agency.
When Richard M. Nixon was elected President in 1968, Cohen was serving the last year of his five-year term. In February 1969, Cohen was dismissed as Chairman; Commissioner Hamer H. Budge was appointed to replace him. Cohen then resigned from the Commission.
The Budge appointment was criticized by the strongest SEC supporters in Congress. Fearful that the agency would be weakened by Nixon's political appointees, the Senate challenged Budge's credentials and experience at his confirmation hearing. Supporters of a strong regulatory scheme remained skeptical of self-regulation and feared that the weakening of the SEC could harm the agency's effectiveness as the nation's economic and market system grew more diverse, complex and international.
Budge proved to be a capable, if less activist, Chairman. A former five-term Idaho Congressman, he preferred that major decisions concerning the securities industry be made by Congress or the federal courts instead of by administrative rule. Despite that attitude, in Budge's two years as Chairman, the SEC made considerable progress in dealing with the broker-dealer back-office crisis that arose when tremendous numbers of stock transactions could not be completed for days after the sale.
In addition, three new securities acts -- the Securities Investors Protection Act, the Investment Company Act Amendments, and the Williams Act Amendments -- were passed in 1970 during his tenure. The SEC also initiated new studies of the stock market that would provide the basis for the establishment of an electronically linked national securities market system in the ensuing years.
