NEW YORK (Reuters) - Nasdaq Stock Market Inc. (NDAQ.O) on Thursday named former Congressman Michael G. Oxley, co-author of the Sarbanes-Oxley securities legislation, as nonexecutive vice chairman.
A former U.S. Representative from Ohio and chairman of the House Financial Services Committee, Oxley will meet with chief executives of Nasdaq listed companies on public policy issues in the newly created position from offices in Washington and New York.
“Every CEO in America realizes their success is directly tied to some policy in Washington,” said Bob Greifeld, president and CEO of Nasdaq. Oxley will report to Greifeld and serve as an adviser to him.
The Sarbanes-Oxley Act, adopted by Congress in 2002 in the wake of high-profile bankruptcies such as Enron Corp.‘s, has drawn criticism for its extensive disclosure requirements and associated costs of adhering to the rules.
Earlier this year, President George W. Bush said an excessive number of lawsuits and over-regulation were hurting the competitiveness of U.S. financial markets.
Both Oxley and Greifeld said they stand by the legislation’s core ideas, but they advocated refinements.
“Sarbanes-Oxley was all about accountability and transparency,” Oxley said. “Its hard to argue against those principals ... It’s also true that no piece of legislation is perfect.”
It has not been an easy year for the largest U.S. electronic stock exchange, which disappointed investors earlier this month by cutting transaction fees, lowering the price of its shares by as much as 7 percent on March 1.
Nasdaq has been under pressure from rival NYSE Group Inc. NYX.N and alternative trading venues like BATS Trading, which recently handled more than 10 percent of daily volume in Nasdaq-listed securities.
Investors were also rattled by the company’s quarterly earnings call last month, when Nasdaq lowered a 2007 earnings forecast, dropping share prices 5 percent for the day.
Nasdaq also saw its hostile bid for the London Stock Exchange (LSE.L) overwhelmingly rejected by shareholders in February, raising questions about the exchange in an industry that has become increasingly global.
Earlier this month, Oxley joined the government policy group at Baker Hostetler LLP in Washington. His position with Nasdaq will not affect his role at the law firm, Oxley said.
The hiring continues a revolving door between Washington and Wall Street, which has traded top executives and former politicians.
Former Rep. Harold Ford Jr. was named a vice chairman of Merrill Lynch & Co. Inc. MER.N earlier this year. He is also chairman of the Democratic Leadership Council in Washington.
Henry Paulson and Robert Rubin both left Goldman Sachs & Co. (GS.N) to become Treasury secretary under Presidents Bush and Clinton, respectively.
Reporting by Amitha Rajan in Bangalore and Yung Kim in New York