Byron D. Woodside, William L. Cary, Edward N. Gadsby and J. Allen Frear, Jr.
Cary's goals for the SEC were both reformist and traditional. Long an admirer of William O. Douglas, the activist SEC Chairman during the 1930s, Cary focused on completing several unfinished reforms attempted during the New Deal. These reforms included enhancing SEC authority over all unlisted brokerage firms over a minimum size, and abolishing floor trading, which occurred when a stock exchange member executed orders on the floor for its own account.
In Cary's view, the exchanges operated too much like private clubs to benefit their own members, often contrary to the public interest. Cary recognized that the key to revitalizing the SEC and addressing those concerns would require political tact and skill. Working with Congress to utilize the policy research resources of the agency and carefully expanding the power and reach of the SEC through administrative opinions and court decisions, Cary began to address that unfinished business.(5)
Neither Congress nor the SEC had conducted any broad examination of the securities industry since the Pecora hearings over twenty years ago. Cary realized that the institutional competence of the SEC and its ability to successfully navigate the political landscape required a deeper understanding of the current market conditions and issues. As the market grew in both size and sophistication, the New Deal studies increasingly had become outdated.
Cary employed consultants to make "critical studies of the Commission in light of current problems."(6) But these studies were piecemeal, and Cary soon realized that for maximum effectiveness, the SEC staff needed to undertake a full and complete examination of the markets and then commit to fight for and implement legislative changes.
(5) Seligman, Transformation, 294.
(6) Ibid., 295.
