Glassman, a ‘Champion’ of Investors, to Exit SEC

Cynthia A. Glassman, the longest-serving current member of the Securities and Exchange Commission, plans to resign after her term ends June 5, the SEC said Monday.

Glassman, a Republican economist who frequently has urged the SEC to consider the costs of its rules, began serving on the commission in 2002.

If a replacement is not named by the time her term expires, Glassman could stay on until her successor takes office, or the SEC could function with four instead of five members.

“I suspect she will serve until a successor is confirmed in order to avoid a stalemated 2-to-2 split,” said Columbia University Law School professor John Coffee.

Glassman was on the losing side of controversial SEC votes, along with Commissioner Paul S. Atkins, under the tenure of previous Chairman William H. Donaldson. He was replaced in mid-2005 by the present chairman, Christopher Cox.

“We’ll probably get a commissioner Chairman Cox has chosen or favors. I think he feels a need to build his own team. He’s been caught between two fairly polarized sides,” Coffee said.

Glassman came to the lawyer-dominated SEC after working at accounting firm Ernst & Young, for consulting firms and for the Federal Reserve.

“She brought a unique perspective to the commission as an economist. That was needed because the commission should look at the costs and benefits of its rules,” said Michael McCoy, a former SEC staffer who is now with law firm Bryan Cave.

The Investment Company Institute, which represents mutual fund advisors, said in a statement that Glassman had been “a consistent and steady champion for the individual investor.”

Most SEC votes are unanimous and Glassman agreed with her colleagues on the majority of decisions.

But she was in the 3-2 minority on three fractious occasions: when the SEC voted for new stock market trading and pricing rules; when it voted for new rules forcing hedge fund advisors to register with the SEC; and when she opposed an SEC order requiring that mutual fund board chairmen and three-quarters of directors be independent of fund managers.

“She was, along with Commissioner Atkins, frequently a critic of some of the recent rule-making. She felt that some of the costs weren’t worth the benefit,” McCoy said.

The SEC has five commissioners appointed by the president and approved by the Senate. Their terms are staggered, with one term ending each year. No more than three commissioners can belong to the same political party.

Cox, Atkins and Glassman are Republicans. Commissioners Roel C. Campos and Annette L. Nazareth are Democrats.