Tough Act to Follow

As the newly appointed chairman of the Securities and Exchange Commission, G. Bradford Cook would seem to be in an uncomfortable spotlight. At 35, he is the youngest man ever to head the agency, he is almost unknown among the Wall Streeters he will regulate--and he has one of the toughest acts in Washington to follow. In a whirlwind 22 months in office, his predecessor, William J. Casey, began more far-reaching reforms of the securities industry than at almost any time in the SEC's 38-year history. To mention only two, brokers who had always charged commissions fixed by stock exchanges were forced to negotiate rates with their clients on trades worth more than $300,000, and steps were taken to link together stock exchanges round the country into a sort of maxi-market.

If Cook feels any pressure, however, it is not readily apparent. Only two weeks after taking over from Casey, who became Under Secretary of State for Economic Affairs, Cook is serving notice that he too will be an activist, but of a different kind. Instead of a machine-gun fire of new ideas, he indicates, Wall Street for a while can expect intensified pressure to complete the reforms that Casey began. "The pipeline is already full of Casey ideas," he explains, "and the task now is to move some of them through. My old division [the SEC division of market regulation, a Casey creation that Cook headed] is working night and day just to keep even, and I can't load them up any more."

Cook's top priority will be the development of a central market system under which stock exchanges all over the country will be hooked together by a tape that will let investors know where they can buy or sell securities for the best possible price. At present, variations of 2% or more can occur for the same stock in different markets, but few investors are aware of it because most see quotes only on one exchange.

The new SEC chief also will press to lower the floor for negotiated commissions to trades of $100,000 or more by the end of this year. Cook asserts bluntly: "My friends on Wall Street tell me blood will flow if this happens, but we are going to keep pushing anyway." He hints that he will be referring to the Justice Department, for possible prosecution, more cases in which the SEC suspects that investors have profited by trading on the basis of corporate information not disclosed to the public.

Cook, the son of a Nebraska banker, who went to Washington 18 months ago with a standard Republican background as a securities lawyer, plans one change within the SEC's 1,500-man staff: haircuts for some of the shaggy-locked, walrus-mustached young lawyers who were attracted to the commission by Casey's go-go reputation. Cook insists that he does not care what his mod squad looks like in the office, but "they cannot go into court with their hair hanging below their ears." Despite that stand, his appointment has been as well received by the commission staff as it has on Capitol Hill. Some powerful members of Congress have their own ideas for legislating changes in the securities industry. Cook remarks dryly: "I hear Congress is loaded for bear, and I wonder if I'm the bear." So far, there is no sign that he is. His confirmation hearing whistled through the Senate Securities Subcommittee of Banking and Currency in less than an hour.

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