President Nixon nominated G. Bradford Cook, a corporate and securities lawyer on the SEC staff, to succeed Casey in February 1973. Cook, at 35 the youngest SEC Chairman ever nominated, was well qualified for the position. He had served as General Counsel, working closely with Casey on the SEC's 1972 "Future Structure of the Securities Market Statement." He had also served as the Director of the Division of Market Regulation.
After taking over from Casey, Cook served notice that he would be an activist, intent on pushing through the many ideas that the Casey-led SEC had begun. "The pipeline is already full of Casey ideas," he explained, "and the task now is to move some of them through."(26) His nomination hearing before the Senate took less than an hour, and Cook took over the reins of the SEC in March.
But Cook would also be caught up in the tentacles of Watergate and related scandals. While he served as SEC General Counsel, the SEC had begun an investigation into the activities of financier Robert Vesco, whom the SEC accused of looting securities from the Overseas Investment Services Mutual Fund Company. Under pressure from President Nixon's campaign manager John Mitchell and campaign fundraiser Maurice Stans, Cook ordered SEC staff to delete from the SEC complaint any reference to Vesco's illegal $200,000 contribution to the Nixon campaign. As a result of an independent investigation, Mitchell, Stans and Vesco were indicted for alleged violations of federal campaign finance laws.
Details of their meetings with Cook came to light during the Vesco investigation. When called to testify before the Senate about the alleged deletion, Cook admitted that Mitchell and Stans had indeed met with him several times to discuss how the Vesco contribution should be handled in the SEC complaint, contradicting his previous grand jury testimony.
Shortly after his Senate testimony, Cook announced his resignation as Chairman of the SEC "because of my complete respect for the Securities and Exchange Commission and its dedicated staff." Cook's resignation statement continued, "By my action today, I hope to enable the Securities and Exchange Commission to move ahead with the urgent, unfinished business that affects our economy in so many ways."(27) He had served a mere 74 days.
The SEC appeared to be at a crossroads. Long able to maintain its political independence amidst a myriad of regulatory and intellectual challenges, it now faced a crisis of confidence. Was its bright image among administrative agencies real or a mirage? The response to that question, from the SEC, its Chairmen, Commissioners and staff, would determine whether the agency would remain over the next decade, as some have called it, "the most effective agency in the federal government."(28)
(26.) "Tough Act to Follow," Time, March 12, 1973.
(27.) "Cook Note and Statement," New York Times, May 17, 1973, 36.
(28.) William O. Douglas, Foreword, The George Washington Law Review (October 1959), 5.
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