Has the SEC gone too far with its post-Enron reforms? Some business groups with chits to cash in from the November election think so and they want the head of SEC Chairman William Donaldson as a result reports the Wall Street Journal. If Donaldson were to leave the SEC soon the change could have significant effect on fund industry regulation.

Despite being appointed by a Republican administration, Donaldson has sided with the Commission's two Democrats on rules that increase fund industry disclosure and oversight in those cases in which it split 3-2 on party lines. A new Commissioner would theoretically mean a switch in those votes and open the opportunity for some rules to be revoked. The most controversial for the fund industry being the rule requiring boards to have independent directors as chairs.

Among the groups seeking a new SEC chief are the Business Roundtable, the U.S. Chamber of Commerce and the National Association of Wholesaler-Distributors.

The groups oppose the extent of the post-Enron corporate reforms, believing that they discourage risk-taking by American companies, the paper reports. They also are feeling their oats after Bush campaign manager Ken Mehlman gave them credit for helping to re-elect President Bush.

The lobbying of the groups may already be having effect. Last week Donaldson sided with the Commission's two Republicans and against its two Democrats by voting to void a settlement between former Global Crossing Chairman Gary Winnick and the SEC staff that fined Winnick one million dollars.  

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