Three Former SEC Chairs Endorse Obama Presidential Bid

Three former SEC chairs have endorse Democratic Sen. Barack Obama's bid for the presidency William Donaldson, Arthur Levitt and David Ruder, will join former Fed Chair Paul Volcker in endorsing Sen. Obama, his campaign said. Mr. Volcker endorsed Sen. Obama in January. In a statement released by the campaign, the former chairs said they believed that Sen. Obama would take a "reasoned approach" to "balanced regulatory reform."

Among other things, the senator has called for improved transparency in the market by investigating potential conflict of interest between credit rating agencies and financial institutions. Credit agencies are paid by the issuers of securities, not by the buyers of securities, which creates a potential conflict of interest in favor of issuing strong securities ratings. This problem was illustrated in the subprime market crisis in which credit rating agencies strongly rated subprime mortgage securities even as there weresignificant indications of large numbers of foreclosures and a weakening housing market. Sen. Obama supports an immediate investigation into the ratings agencies and their relationships to securities’ issuers, similar to the investigation the EU has recently announced.