WASHINGTON, Dec. 10 (UPI) -- Securities and Exchange Commission nominee William Donaldson vowed Tuesday to work to weed out malfeasance and restore America's confidence in its investment markets.
That confidence, he said, had been "seriously eroded" by the Enron and WorldCom scandals, and all concerned -- in business as well as government -- needed "to pull up our socks."
"Confidence in the U.S. corporate and financial industries has been seriously eroded during the past few years," he said. "Restoring the confidence of investors in the integrity of the markets is the responsibility of all of us.
"Corporate managers, boards of directors, operators, regulators of our financial markets, as well as those who advise, including bankers and lawyers and accountants, must be constantly mindful of the trust that shareholders have placed in them.
"Each of us must take that trust very seriously."
Donaldson, former chairman of the New York Stock Exchange and an investment banker, was nominated by President George W. Bush to replace Harvey Pitt, who resigned last month amid criticism over a questionable appointment to the new National Accounting Board, formed in the wake of the Enron and WorldCom scandals, in which it was disclosed the companies had questionable accounting practices.
Donaldson said he would not comment on his exact plans until the Senate confirmation process was completed.
In announcing his pick in the Roosevelt Room of the White House, Bush cited the SEC's success in investigating malfeasance. More than 100 corporate executives have been barred from serving on corporate boards, he said, and millions of dollars of improper financial gains have been returned.
Still, Bush said, more needed to be done, and he promised full support to Donaldson and his entire agency.
"We must continue to prosecute corporate criminals. We must implement the provisions of the Sarbanes-Oxley Act, from broader disclosure requirements to tougher penalties for wrongdoing, to removing executives who break the faith with the shareholders and the American people," Bush said.
"Public confidence in our market and our stock exchanges and in companies is absolutely essential to our free enterprise system, and to a growing and dynamic economy that creates jobs and opportunities for each and every American."
Bush said he will ask the new Congress for more funds for the SEC, virtually doubling its operating budget in 2004 from 2002.
Donaldson was co-founder of investment banking group Donaldson Lufkin & Jenrette and was a founder of the Yale University School of Management. He has also held the post of chairman of the insurance conglomerate, Aetna.
Donaldson's was the second nomination in the White House shakeup of the president's economic team. Treasury Secretary Paul O'Neill and economic adviser Lawrence Lindsey were asked to resign last week amid a spike in unemployment figures and concern that a continued sputtering economy could affect the president's 2004 re-election bid.
On Monday, the president nominated John W. Snow, chairman of the transportation conglomerate CSX to replace O'Neill. Stephen Friedman, another Wall Street figure, is expected to be named to replace Lindsey, who helped craft the president's earlier tax cuts.
(Shihoko Goto in Washington contributed to this report.)