Christopher Cox, trying to protect his own reputation, is now calling for an internal investigation of the SEC to find out how the Madoff Ponzi scheme went undetected for 10 years. Was Cox asleep at the wheel or was he just oblivious to what was going on in his own agency. Did a personal relationship between one an SEC attorney and a Madoff compliance lawyer hamper investigation, as Blogging Stocks Peter Cohen questions?

Cox, feeling the heat, ordered a full and immediate review of past allegations against Madoff and his firm. He wants to know why staff didn't act upon them. This investigation will include all staff contact with Madoff family members.

Well maybe we'll find out some of these answers, but even if we do the damage is done to all the individuals and institutions that took a beating while the SEC slept. The SEC admitted as this investigation started that Bernard Madoff and his securities firm had "repeatedly" been under question by the SEC staff since 1999, but staff never recommended action to the commission.

When Christopher Cox was appointed by President George Bush to head the U.S. Securities and Exchange Commission, some people compared it to putting the fox in charge of the hen house -- certain he would destroy all that had been built by one of the SEC's most effective leaders, Arthur Levitt. Wall Street wanted someone who it knew would reduce regulation and enforcement. They got what they wished for -- but are they pleased with the results? Probably not. Arthur Levitt was tough to deal with but I doubt any of this Wall Street mess would have happened if he were still in control of the SEC.

The Bernard Madoff scandal is just another in a long string of missteps from the agency Christopher Cox helped to dismantle. Cox's budget cuts and the regulation changes he encouraged removed the SEC's enforcement division's teeth, making it harder for the agency to impose penalties on corporations.

Christopher Cox rarely took a stance against anything Wall Street could dream up. When Bear Stearns was in trouble, he was like Nero declaring there wasn't a problem as Rome burned. Just three days after Cox assured investors all was well, Bear Stearns collapsed.

Cox Communications, the privately-held cable television and high-speed internet powerhouse headquartered in Atlanta, made a bold move this morning by announcing that it plans to launch nationwide wireless service in the second half of 2009. Like many of us, you may be asking "do we really need another national wireless carrier?" Cox apparently thinks so. It's into almost all telecom fields these days: home television, video on demand, high speed internet and home/business telephone service. Why not wireless? The company recently bid $500 million at FCC auctions to buy wireless spectrum in many of its markets. Now is a good of a time as any.

It's no surprise. Competitors AT&T, Inc. (NYSE: T) and Verizon Communications, Inc. (NYSE: VZ) are increasingly intruding into Cox's turf by offering television service and high-speed internet using their own nationwide telecom infrastructure. Cox has competed for quite a long time on those offerings, but the willingness of the old Bell companies to get into digital television delivery must have sent Cox over the edge. Add satellite television into the mix and Cox thinks it needs to be a player on every possible platform it can. It's right.

The Wall Street Journal reports (subscription required) that the SEC will temporarily prevent investors from selling stocks short -- that is, borrowing shares and then selling them in the hopes of buying them back at a lower price later to profit from a decline in value. According to the Journal, "It's unclear whether the halt will be limited to a certain number of financial stocks or how long it would last."

The SEC had previously limited its crackdown of sorts to so-called "naked short selling", the act of selling shares short without securing a borrow. But that's a separate issue. The short selling of stocks is almost universally viewed as a valid tactic that adds to the efficiency of the market, and it's clear why the SEC is now banning it: this isn't about leveling the playing field or making the market more fair or efficient. This about the SEC using its power to manipulate the market upward.

I certainly don't think that that's a valid role for regulators to play but, if it is, why stop with a ban on short selling? Why not just implement on a ban on selling stocks? That's right: sell a stock, go to jail.

Now perceptive readers may have seen the flaw in this proposal: if no one is allowed to sell stocks, how will anyone be able to buy them? Glad you asked: let's just make it so that the only people allowed to sell stocks are insiders! That should make all the crybaby CEOs at cash-burning companies pretty happy, and apparently that's this SEC's primary objective.

UPDATE: The ban on short-selling will only effect financial stocks, per this press release from the SEC website.

When SEC chairman Chris Cox announced an "emergency" rule to make short-selling in certain financial stocks more difficult, the reactions basically fell into two categories: 1.) How stupid: that will create an artificial price increase not justified by fundamentals. 2.) How stupid: if that's a legitimate rule, why not apply it to all companies?

Continuing on the theme of hypocrisy and scapegoating, The Wall Street Journal reports (subscription required) that Cox is set to extend the emergency rule to include "insurance, housing-industry and a broader range of financial stocks."

In other words, let's protect all the stocks that deserve to go down from going down.

I've spent the past few hours trying to figure out who exactly these "emergency" rules are protecting. Why do we need to make a special effort to curb short-selling in companies that are fine, as their defenders insist? Are they protecting the longs? But if these companies are in such great shape and the shares are heinously undervalued because of short-selling, wouldn't that present a great opportunity for investors to go long and profit from the long-term tendency of stocks to move to reflect their intrinsic value? Heck, where are the buyout firms that could be scooping up these undervalued victims of market manipulators?

What's so pathetic about these SEC rules is that they're a giant waste of time, essentially trying to micromanage day to day price swings in companies with futures that are very much up in the air -- time that should be used to improve the poor, and possibly misleading disclosures at many of these firms that led to so much pain for investors.

While calling Arthur Levitt's tenure as chairman of the Securities & Exchange Commission ineffective would be an understatement, he could, and still can, be relied upon to say the right thing. Now that the SEC finally has the quorum necessary to take action on a variety of issues, they should take Levitt's advice about proxy access changes.

Earlier this year the SEC made it impossible for shareholders to change the way directors are elected -- one of the most anti-investor events in recent history -- and it's time for that to change. Levitt writes in The Wall Street Journal that "While not a panacea, giving shareholders a bigger voice in the companies they own would go a long way in helping to restore trust."

Exactly. Some critics of strong corporate governance say that the SEC shouldn't meddle in these affairs. I basically agree: but the problem is that the SEC has meddled, making it impossible for shareholders to take control of their own companies when necessary.

Fed Chairman Ben Bernanke along with SEC Chairman Christopher Cox and Treasury Secretary Henry Paulson testified before the Senate Banking Committee on the state of the U.S. economy and financial markets. In his prepared remarks, he focused on the credit crisis in the financial markets, the deteriorating financial conditions of many of the major banks, the housing downturn and the increase in unemployment.

Chairman Bernanke acknowledged the possibility that the economy could slip into a recession but did not say it would do so. He emphasized the moves that the Fed has made to address these problems: the use of the new term auction facility (TAF) and the reduction of the Federal Funds Rate target by 225 basis points from 5 ¼% to 3% since September.

One of the most important aspects of the testimony is the secondary focus on inflation. Chairman Bernanke did not even mention inflation until almost halfway through his testimony. When he did, he clearly relegated it to a secondary role.

He emphasized that his primary focus is on the weak economy. In essence, the Chairman said that he gets it and understands the gravity of the situation. He mentioned the FOMC "will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks."

This is quite a change from his prior statements and further indicates his willingness to take aggressive action to cushion the economic downturn as demonstrated by his two most recent rate cuts. All eyes will be on the next FOMC rate decision for additional confirmation of the Fed's aggressive loosening of monetary policy.

Doug Roberts is the Founder and Chief Investment Strategist for FollowtheFed.com. He previously held executive positions at Morgan Stanley Group and Sanford C. Bernstein & Co.

The Securities and Exchange Commission has unveiled a new internet tool, the Executive Pay Finder, to make it easier for investors to research and compare executive compensation at public companies.

Chairman Chris Cox said that "Gone are the complicated data expeditions that forced investors to hunt through financial statements. The result is quicker and better analysis, and better-informed shareholders."

For now, the service only provides data on the top 500 U.S. companies that have filed proxy statements with the SEC, but it's a pretty cool tool.

Here's the summary table for Coca-Cola (NYSE: KO), and you can compare the compensation of officers by position with those at other companies, all in the same table. Here is a comparison with PepsiCo (NYSE: PEP).

You can even import the results to an Excel spreadsheet if you're feeling especially anal retentive.There's nothing new here, but it's good to see the SEC making an effort to make important disclosures more accessible to investors.

Now if only Cox and his fellow commissioners would stop making it harder for shareholders to actually effect change at the companies they own.

Yesterday I wrote about a new SEC rule that will make it easier for corporate managers to reject shareholder efforts to put their own board nominees on the ballot.

The decision is a disaster for corporate governance in America, and the Wall Street Journal's headline today pretty much sums it up: "Cox, in Denying Proxy Access, Puts His SEC Legacy on the Line."(subscription required). Christopher Cox is the Chairman of the SEC.

The Journal adds that "The tensions over proxy access may tarnish Mr. Cox's image as a self-proclaimed investor advocate. It also reopens concerns he had so far deflected: that he would roll back shareholder rights in favor of business interests, as well as questions about the effectiveness of his consensus-based approach to rule making."

The argument against broader proxy access is pretty lame: Business groups argue that this will allow corporations to prevent special interest groups like labor unions or GreenPeace from hijacking public companies to further their own interests. That would be a valid point except that special-interest groups rarely gain enough shareholder support to win board seats -- If they do get the number of votes needed to get on the board, then it isn't really a special interest: most shareholders support it!

What this will really do is make it easier for incompetent or just plain bad directors to insulate themselves and management from accountability. That's wrong and it's bad for business.

Comcast Corporation (NASDAQ: CMCSA), the massive cable, telephone and Internet service provider, was mentioned as one heck of a bargain in Barron's Magazine (subscription required), with one article participant labeling it as one of the cheapest 15 stocks in the S&P 500. The combination of strong revenue growth of 18% and strong cash generation could finance a $20 billion buyback, driving the $40 per share, one analyst believed.

However, despite being the number one player in this space, Brian Roberts, Comcast CEO, could be frustrated seeing his other cable brethren potentially making billions, particularly Cox Communications, who went private a few years ago, and Cablevision, who is in the process of going private. While Roberts & Family owns 100% of the voting stock, it only owns around 3 to 4% of the economic shares. The cumulative value of these shares approaches $1b, meaning Roberts could walk away with tens of billions in a successful private equity deal. While shut down for now, the private equity market will not be shutdown forever.

The numbers at Comcast are impressive, now serving 24 million homes versus number two Time Warner who serves 13 million. Comcast also has a presence in 20 of the 25 largest cities in the US.

Will Roberts ever take the private-equity leap, adding more debt on to the $33 billion already on its balance sheet? Most likely not. What has made Comcast the number one player in this space is the Roberts family's wise use of debt. Expect huge share buybacks to be the means for the industry pioneers to increase their ownership in the cable giant. The Roberts family is too risk averse to leverage this gem of a company to the hilt.

MOST NOTEWORTHY: Red Lion Hotels (RLH), Constellation Energy (CEP), Brinker Int'l (EAT), Nvidia (NVDA) and InfoSpace (INSP) were today's noteworthy upgrades:

• Baird upgraded Red Lion Hotels (NYSE: RLH) to Outperform from Neutral based on valuation, brand expansion progress and takeover potential.

• Constellation Energy (NYSE: CEP) was upgraded to Buy from Hold at Citigroup based on higher cash flow expectations and valuation.

• JP Morgan upgraded Brinker (NYSE: EAT) to Overweight from Neutral, and sees potential upside from slower unit development and a possible Mac Grill sale.

• BMO Capital upgraded Nvidia (NASDAQ: NVDA) to Outperform from Market Perform following a strong second quarter.

• Stanford upgraded InfoSpace (NASDAQ: INSP) to Hold from Sell on valuation; They consider the core online segments looks to be priced into the stock and downside support is given with tax credits and the cash balance...

OTHER UPGRADES:

• Citigroup raised Cox Radio (NYSE: CXR) to Hold from Sell.

• JP Morgan upgraded shares of PepsiAmericas (NYSE: PAS) to Neutral from Underweight.

• Friedman Billings upgraded shares of Emulex (NYSE: ELX) to Outperform from Market Perform.

• DirecTV (NYSE: DTV) was raised to Buy from Hold at Gabelli.

• Seagate (NYSE: STX) was upgraded to Buy from Neutral at Goldman.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: Expedia (EXPE), YRC Worldwide (YRCW), Fiserv (FISV), and select radio stocks were today's noteworthy upgrades:

• JP Morgan upgraded Expedia (NASDAQ: EXPE) to Overweight from Neutral on expectations for U.S. bookings growth and margin stabilization.

• YRC Worldwide (NASDAQ: YRCW) was raised to Neutral from Underperform based on valuation.

• Fiserv (NASDAQ: FISV) was upgraded to Sector Outperformer from Sector Performer at CIBC following the CheckFree (CKFR) acquisition.

• Banc of America upgraded Citadel Broadcasting (NYSE: CDL), Cox Radio (NYSE: CXR) and Entercom Comm (NYSE: ETM) to Neutral from Sell as they believe it is time to cover short positions with the expected Q3 weakness likely priced into shares. They caution that this upgrade is not a buy signal as downside risk remains...

OTHER UPGRADES:

• Wachovia upgraded Cabela's (NYSE: CAB) and KBR Inc (NYSE: KBR) to Outperform from Market Perform.

• Baird raised Lear (NYSE: LEA) To Outperform from Neutral.

• Nokia (NYSE: NOK) was upgraded to Outperform from Neutral at Credit Suisse.

• Pacific Crest upgraded shares of eBay (NASDAQ: EBAY) to Outperform from Sector Perform.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: MGM Mirage (MGM), Motorola (MOT), Navteq (NVT), ExxonMobil (XOM) and Intel (INTC) were today's noteworthy upgrades:

• Lehman upgraded shares of MGM Mirage (NYSE: MGM) to Overweight from Equal-Weight on valuation as they believe the market is currently undervaluing the company's growth prospects.

• Motorola (NYSE: MOT) was raised to Market Perform from Underperform at JMP Securities on valuation.

• Following the acquisition of competitor Tele Atlas by TomTom, CIBC believes Navteq (NYSE: NVT) is well positioned to gain share, upgrading the stock to Sector Outperformer from Sector Performer, and believes Garmin (GRMN) should consider buying the company for its exclusive map content.

• AG Edwards believes the recent pullback in ExxonMobil (NYSE: XOM) has created a buying opportunity, upgrading shares to Buy from Hold.

• Intel (NASDAQ: INTC) was added to American Technology's Focus List following its recent sell-off...

OTHER UPGRADES:

• Citigroup upgraded Ingersoll-Rand (NYSE: IR) to Buy from Hold.

• Cox Radio (NYSE: CXR) was upgraded to Outperform from Market Perform at Wachovia.

• JP Morgan upgraded transports Knight Transportation (NYSE: KNX) and Norfolk Southern (NYSE: NSC) to Overweight from Neutral.

• PepsiCo (NYSE: PEP) was upgraded to Buy from Hold at Matrix USA.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Walt Disney Co. (NYSE: DIS) is getting tired of explaining to advertisers why it has fewer viewers. One reason ad performance is dropping has nothing to do with the networks losing audience. It is a technology issue. Viewers with digital video recorders can skip the ads.

Disney has a way to claw some of the audience back. It can refuse programming licenses to cable systems for on-demand applications unless the ads run as they were placed in the shows. This philosophy is at the heart of a new deal with Cox Cable. Disney will license [subscription required] its ESPN and ABC networks to Cox, but the cable system must ensure that the cable customers see all of the markets' messages.

Rentrak, a research firm, estimates that cable on-demand orders have gone from under 200 million per quarter in 2004 to over 700 million in Q107. So, Disney has real leverage by threatening to hold back valuable content. According to The Wall Street Journal, "Media research firm Convergence Consulting predicts VOD revenue will total $1.6 billion this year, with the business growing to $3.9 billion by 2010."

The digital video recorder business had traditional broadcasters on the ropes. They could no longer guarantee their huge advertisers that their commercials would be seen. With the Cox deal, the networks are beginning to push the pendulum the other way.

Douglas A. McIntyre a partner at 24/7 Wall St.

SEC Chairman Christopher Cox said on Sunday that, by 2009, the United States and Europe should be able to agree on a single set of General Accepted Accounting Principles. Until recently, many European companies with American Depositary Receipts trading on U.S. exchanges were required to issue two sets of financial statements -- one for their European investors and another for their American ones. They complained about the added expense and annoyance, and now companies can choose to report results to American investors under IFRS international standards, but this can still be confusing for investors here.

Of course, the strict requirement of Sarbanes-Oxley may prove to be an obstacle in working out a deal, but this is good news. International accounting standards would make our markets more competitive, something they are desperately in need of as more and more companies pursue listings in London. Now if only we can convert to the metric system...