SEC chairman sat out 29 votes
business-times.asia1.com.sg
US Securities and Exchange Commission chairman Harvey Pitt, who promised to avoid matters involving former law clients, sat out 29 votes in his first 10 months in office, leaving a single commissioner to decide three cases, according to SEC records.
Ernst & Young LLP last week challenged the commission for charging the fourth-largest accounting firm with violating auditor-independence rules on the vote of one commissioner. Ernst, a former Pitt client, told an administrative law judge the SEC had deprived it of a 'plural, deliberative process'.
Some legal experts and investor advocates said Mr Pitt's missed votes show that his past representation of brokerages and accounting firms can undercut the functioning of Wall Street's top enforcement agency at a time when two of its five seats are vacant.
'The commission's barely had enough people voting in recent years even with no one recusing themselves,' said Patrick McGurn, vice-president of Institutional Shareholder Services Inc, which advises US fund managers on corporate governance. 'If they end up having one of their decisions thrown out by a court because of these recusals, they've only got themselves to blame.'
Spokeswoman Christi Harlan said Mr Pitt is 'living up to the letter and spirit of his ethics agreement', which calls for him to sit out votes related to former clients for a year.
'As far as my recusals, I think the question is, 'What is in the best interests of investors?' ' Mr Pitt said on Thursday in a speech before the New York Financial Writers Association. 'Having spent 34 years as a securities lawyer, I know where the bodies are buried. I believe that experience is to the benefit of public investors.'
SEC commissioners vote in public sessions and in private, later releasing those records. Bloomberg News reviewed 275 votes cast by the commission from August, when Mr Pitt took charge, through April, and matched the votes against a list of 112 clients Mr Pitt filed with the government ethics office.
Mr Pitt was listed as 'not participating' in 24 votes and abstaining in three others. In May and June, Mr Pitt sat out two more votes, according to SEC officials. Twenty of the 29 matters involved former law clients, according to his ethics filing. - Bloomberg |
