DJ SEC's Glassman Talks Market Reform As Pitt Bows Out
11/05/2002
Dow Jones News Services
(Copyright © 2002 Dow Jones & Company, Inc.)
By Phyllis Plitch
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--In a speech that studiously avoided any mention of the controversy surrounding Securities and Exchange Commission Chairman Harvey Pitt and the new Public Company Accounting Oversight Board, SEC commissioner Cynthia Glassman recounted the SEC's efforts to restore investor confidence in the markets.
Glassman, a last-minute replacement for Pitt, said the SEC has been working over the past year to help clean up financial scandals. She also called upon the financial executives in the audience to do their part.
"We have to do more than simply deter and punish bad conduct. We must incent good conduct," she said. "We need you to do better. Only then will we be able to restore investor confidence."
Glassman spoke Tuesday at a conference sponsored by Financial Executives International.
Glassman declined comment before her speech about issues concerning Pitt and the accounting board, and wasn't directly confronted by such questions in a post-speech question-and-answer session with the financial executives.
Pitt's absence was explained by SEC representatives as a scheduling conflict, but it piqued the interest of chief financial officers and corporate comptrollers in the audience, who wanted to know why he was a no-show. The executives also questioned the impact of the current situation on the effectiveness of the SEC and the public accounting board.
FEI President Philip B. Livingston said he didn't want to "fuel the fire," and declined to ask such written questions from the audience during the Q&A session.
"It doesn't help them in their jobs in financial reporting and investor relations to worry about the current crisis at the SEC. They are here to learn about the current state of proposed regulations," Livingston said.
Controversy continues to swirl around Pitt as calls mount for him to step down. The SEC chairman is in hot water because of a potential problem with William Webster, his choice to head the new accounting oversight board. Webster had headed the audit committee at U.S. Technologies, a company facing allegations of fraud. Webster had informed Pitt of the issue, but Pitt didn't tell fellow SEC commissioners about it before they voted to approve Webster. Four separate investigations have now been launched into the matter.
Robert Herdman, the SEC's chief accountant, himself engulfed in controversy, also canceled a scheduled appearance.
Glassman, who is a Republican appointee to the commission, went through the various pending and enacted rules from the SEC intended to improve disclosure and financial reporting.
"I want to make sure we don't go too far in developing rules that will be very burdensome," Glassman said.
She was responding to a question about whether she had concerns about a backlash against the new rules and regulations. Glassman also said she would like to see financial statements in "simple and concise English." She would encourage a system where companies could report their financial highlights in bullet points and could drill deeper into financial reports for additional information with the help of interactive technology.
-By Phyllis Plitch, Dow Jones Newswires; 201-938-2357
-Michael Rapoport contributed to this report
(END) DOW JONES NEWS 11-05-02
11:27 AM
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