* Crackdown leader Donaldson to step down

William Donaldson, chairman of the Securities and Exchange Commission, is to step down from his post at the chief US financial regulator on June 30, it was announced yesterday.

Mr Donaldson has played a leading role in the crackdown by prosecutors and regulators on abuses exposed in the spate of accounting scandals including Enron and WorldCom.

But in recent months the SEC has been accused by business groups such as the US Chamber of Commerce of going too far in some of its rule making and enforcement action.

Appointed by President George W. Bush, Mr Donaldson became chairman of the SEC in February 2003. His decision to step down came as a surprise. Staff had expected him to continue to head the watchdog until the end of the year. The SEC under Mr Donaldson's leadership has imposed big fines against companies accused of violating securities laws and introduced sweeping rules for capital markets.

Mr Donaldson pushed through reforms that went beyond the 2002 Sarbanes Oxley accounting and governance law and his departure is likely to put the brake on further big changes, such as giving shareholders more powers to nominate directors to troubled companies. He is also credited with restoring stability at the SEC after the turbulent time of his predecessor, Harvey Pitt.

Mr Donaldson said he had been "honoured" to serve as SEC chairman but "the time has come for me to step down and return to the private sector and my family". He went on: "When I assumed the chairmanship of the Securities and Exchange Commission roughly two and a half years ago, public confidence was severely undermined, reflecting the corporate and financial scandals that had shaken the nation.

"Thanks to the dedicated efforts of the many professionals who serve at the SEC, this period has represented an extraordinarily active and effective time for the agency."

Mr Donaldson has recently been grappling with reducing the soaring compliance costs for companies resulting from the Sarbanes Oxley law. In April he pushed through significant changes to stock trading rules, known as Regulation NMS, that represent the biggest single reform he sought.

But last month Mr Donaldson, a Republican, had to defend his leadership to lawmakers who expressed concerns about divisions within the regulator.

Mr Donaldson relied on the support of Harvey Goldschmid and Roel Campos, the two Democratic commissioners at the SEC, to secure approval for Regulation NMS, as well as changes to hedge fund oversight and mutual fund governance. Mr Goldschmid leaves the SEC this summer, and if Mr Donaldson had stayed he could have found it difficult to pursue his reform agenda.

The US Chamber of Commerce, which has led business criticism of the SEC, said Mr Donaldson's successor "will need to focus on ensuring the future competitiveness of our markets".