While ex-SEC Chairman William Donaldson was technically a Republican, he sure didn't vote like one. Donaldson sided not with his fellow Republicans, but with Democratic Commissioners Roel Campos and Harvey Goldschmid on issues like fund governance and the controversial hedge fund registration issue.

In his wake, Donaldson leaves a deep divide between the four remaining Commissioners. While Democratic Commissioner Harvey Goldschmid is leaving and fellow Dem Roel Campos is up for re-nomination, it really doesn't matter who fills those seats, because the ex-Chairman's non-partisan ways will no longer rule the roost at the SEC.

As we wait for President Bush's nominee Christopher Cox (R, California) to be approved as the chairman, he has named Glassman acting chairperson of the SEC, reports Dow Jones Newswires.

Cox will be pivotal in the future of the SEC. As Wednesday's ugly meeting showed, Republican Commissioners Cynthia Glassman and Paul Atkins have only gotten more unified and vehement in their opposition. And Campos and Goldschmid seemed to think alike all along. Dems have asked to re-nominate Campos and name Annette Nazareth, SEC division head, as a replacement for Goldschmid.

At first blush, it seems safe to assume that whoever replaces Goldschmid is moot, since a party-line chairman backed with two stalwart Republicans will render any vote predictable. But is it really safe to assume that Cox will be in the pocket of the party?

A recent article from the Washington Post provides an interesting array of quotes and factoids about the man.

Cox has an "87 percent lifetime rating from the U.S. Chamber of Commerce, meaning he has voted in favor of the chamber's position on legislation most of the time."

Cox is "the kind of person who would correct a lot of [missteps] the Donaldson commission made," Peter J. Wallison, ex-White House counsel who supervised Cox, told the Post. Cox "would be driven by data instead of adopting regulations because they seemed like a good idea," said Wallinson.

But several also say that Cox is a uniter, not a divider. Former representative Jennifer Dunn told the Post that Cox has a "proven ability to marshal fractious groups."

Ultimately, for the fund industry, the most important aspect of the battle at the SEC is when it will end. As Donaldson pointed out in Wednesday's meeting, the uncertainty -- over a chairman and over which rules will stay -- is turning out to be costly.  

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