While I disagree with John McCain that Chris Cox should be “fired” over recent market turbulence, the D.C. Circuit Court of Appeal agrees with McCain that the SEC chair can be dismissed by the President of the United States. An unattributed ABCNews blog is reporting otherwise on the authority of an unnamed source.
In its recent ruling in Free Enterprise Fund vs. PCAOB, the D.C. Circuit Court of Appeals held that the SEC commissioners are “subject to removal for cause” by the President and that the SEC chair “serves at the pleasure of” the President.
In fact, the court’s ruling upholding the constitutionality of the PCAOB rests on the premise that the President can indirectly control the PCAOB through his ability to hire and fire SEC commissioners and chair who, in turn supposedly supervise the PCAOB which Congress nevertheless deliberately designed to be independent and unaccountable to anyone. Here is the language from the court’s opinion:
Members of the Commission, in turn, are appointed by the President with the advice and consent of the Senate and subject to removal by the President for cause; its chairman is selected by and serves at the pleasure of the President. In appellants’ view this statutory scheme vests Board members “with far reaching executive power while completely stripping the President of the authority to appoint or
remove those members or otherwise supervise or control their exercise of that power.”
Hard to say where ABCNews is getting their stuff, but they might want to check first with the PCAOB and the D.C. Circuit. If the D.C. Circuit has it wrong, the PCAOB is in for a fast dismantling.