Cook's Shortest Tour

SECURITIES and Exchange Commission chairmen have ranged from the most vivid personalities (Joseph P.

Kennedy, William O. Douglas) to the dullest (Judge Hamer H. Budge), but they all had one thing in common. While in office, none had been touched by scandal--until last week. Then, G.

Bradford Cook abruptly resigned as SEC head after only 74 days in the job, thus becoming another victim of the spreading Watergate-related revelations. Eleven short weeks ago, Cook seemed likely to make his mark as the youngest SEC chief ever (he is 36), and one who would carry out the far-reaching stock-market reforms begun by his predecessor, William J. Casey; instead, he will have only the unhappy distinction of the shortest chairmanship in the SEC's 39-year history. His departure leaves a shaken agency that will have difficulty carrying out its role of guiding and policing the nation's financial markets.

What brought Cook's tenure to an ignominious end was his involvement in the SEC'S investigation of Financier Robert Vesco, whom the agency accuses of looting securities from the I.O.S. mutual-fund empire started by Bernard Cornfeld. For weeks rumors circulated that Cook, as the commission's general counsel, had deleted from an SEC complaint any mention of Vesco's $200,000 cash contribution to President Nixon's re-election campaign. Supposedly, Cook did that at the urging of former Attorney General John Mitchell, then director of the Committee for the Re-Election of the President, and Maurice Stans, C.R.P.'s chief fund raiser and former Commerce Secretary. Cook claimed that he was innocent of any wrongdoing and until last week insisted that he would "gut it out."

He changed his tune after a 5 1/2-hour grilling by a Senate subcommittee last Monday. During the closed-door session, Cook admitted to Wisconsin Democrat William Proxmire that he had held three or four meetings with Mitchell and/or Stans to discuss how the Vesco contribution should be handled in the SEC complaint. There had even been a cozy tete-`a-tete with Stans at a goose hunt in Eagle Lake, Texas.

In previous testimony, Cook had said that there was only one such meeting.

Cook emerged clearly distressed, and on Wednesday called a press conference to announce his resignation. Still protesting innocence, he said he had been caught in a "web of circumstance" that had impaired his credibility and thus the SEC's.

Ugly Talk. It certainly has. The chairman's exit was cheered by a large segment of the SEC's professional staff, who feel that Cook's short tour has been a distinctly bad trip for the commission.

Some staffers grumble privately that he was less than vigorous in pressing the whole Vesco investigation, which, they claim, reached the courts because of the efforts of two career investigators, Stanley Sporkin and Irving Pollack. There is even speculation in the agency that Cook may have used his inside knowledge of the Vesco contribution to pressure the Administration into naming him, a relatively unknown Midwestern Republican lawyer, as SEC chairman.

That ugly talk hardly squares either with Cook's own story that he insisted Vesco must be haled into court, or with Wall Streeters' impression of Cook as a bright, aggressive securities watchdog.

But it does indicate how seriously the whole affair has shattered SEC morale.

Of late, the SEC has stumbled in carrying out even some fairly routine functions. Standout case: two weeks ago, the agency filed a complaint charging a company called Prudent Real Estate Trust with fraud and deception. Normal practice in such cases is to issue immediately a release informing the financial press. This time the release went out 24 hours later--and during that period, some 2,500 shares of Prudent stock, or more than ten times an average day's turnover, were sold on the American Stock Exchange. The strong suspicion is that insiders who knew of the complaint dumped their shares in time. The delay, says one staffer, occurred because SEC people were too preoccupied with the scandal to pay attention to their jobs. He adds: "The system has just broken down."

How soon it can be put back together is anyone's guess. At week's end indications were that the SEC chairman's seat will be empty for some time.

Meanwhile, everyday tasks will proceed under the direction of Acting Chairman Hugh F.

Owens, but there will be no decisions on major pending policy questions. These include the level of brokerage commissions, attempts to link the nation's stock exchanges into a centralized market system and--ironically--a Cook plan to clarify the rules on insider trading.

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