The president [b]CAN INDEED [/b]fire Cox.

From UCLA Law professor, Stephen Bainbridge (stephenbainbridge.com )

Massive Misinformation on the Web: The President Can Fire the SEC Chairman
ABC News David Wright got the most erroneous meme of the day started when, in reporting John McCain’s criticism of SEC Chairman Chris Cox, Wright claimed that “while the president nominates and the Senate confirms the SEC chair, a commissioner of an independent regulatory commission cannot be removed by the president.” I’ve explained why this is wrong in an earlier post, but Wright’s claim is being widely --- and uncritically repeated—all over the web.

The following blogs have some version of Wright’s claim: Firedoglake, where we’re told asked “Since when do Republicans care what the Constitution says?”

Ben Smith’s Blog.

Comments from Left Field.

Trailblazers

The Swamp

Think Progress

Greg Sargent

Steve Benen

MYDD

Every single one got it wrong.

Update: Even ABC’s so-called “fact checkers” Jake Tapper and Lisa Chinn got it wrong.
In light of the massive misinformation around the web on this point, I’ll repeat here what I said earlier:

“The creation, composition, and powers of the SEC are found in the Securities Exchange Act of 1934. The commission consists of five members who are appointed by the President with the advice and consent of the Senate. The terms of the commissioners are staggered and the basic length of each term is five years. No more than three of the commissioners may be members of the same political party. The statute does not provide for a chairman. Until 1950, the Chairman was elected annually. Following Reorganization Plan No. 10 of 1950 (see, Reorganization Act of 1949, 5 U.S.C. §§ 901-913), the President designates the chairman. Pursuant to this Reorganization Plan, the chairman succeeded to most of the executive and administrative functions of the commission.” S.E.C. v. Blinder, Robinson & Co., Inc., 855 F.2d 677, 681 (10th Cir. 1988).

The President’s powers with respect to appointment and removal of commissioners from the commission thus differ from the President’s power with respect to the appointment and removal of one of those commissioners from the office of Chairman. As to the former, “The Act does not expressly give to the President the power to remove a commissioner. However, for the purposes of this case, we accept appellants’ assertions in their brief, that it is commonly understood that the President may remove a commissioner only for ‘inefficiency, neglect of duty or malfeasance in office.’” Id. Whether the President could remove Cox from the Commision on one of these grounds is debatable, at best, but at least theoretically it’s possible.

Update: To like effect, see MFS Securities Corp. v. S.E.C., 380 F.3d 611, 619 (2d Cir 2004, in which the court stated that “the power to remove Commissioners belongs to the President,” albeit while noting that that “power is is ‘commonly understood’ to be limited to removal for ‘inefficiency, neglect of duty or malfeasance in office.’” See also S.E.C. v. Bilzerian, 750 F.Supp. 14, 16 (D.D.C. 1990), in which the court stated that: “While the Act does not expressly give the President the power to remove a commissioner, it is generally accepted that the President may remove a commissioner for inefficiency, neglect of duty, or malfeasance in office.” So ABC’s Wright’s and Tapper’s citation of a 1935 SCOTUS case dealing with a different agency (namely, the FTC) is irrelvant. The understanding with respect to the SEC is that the President, at the very least, can remove a Commissioner for cause.
What is not debatable, however, is that “The Chairman of the SEC serves as such solely at the pleasure of the President.” Harvey L. Pitt & Karen L. Shapiro, Securities Regulation by Enforcement: A Look Ahead at the Next Decade, 7 Yale J. on Reg. 149, 280 n.557 (1990). Indeed, the Tenth Circuit so held in the Blinder, Robinson case cited above. See 855 F.2d at 681, stating that “as the President has the power to choose the chairman of the SEC from its commissioners to serve an indefinite term, it follows that the chairman serves at the pleasure of the President.”

Hence, when McCain said “The Chairman of the SEC serves at the appointment of the President,” he was right at the very least insofar as Cox’s position as Chairman (as opposed to his position as a commissioner) is concerned.