Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Investment Chat Board Lawsuits -- Ignore unavailable to you. Want to Upgrade?

To: 10K a day who wrote (3056)	5/23/2002 2:38:44 AM
From: Jeffrey S. Mitchell	Read Replies (2) \| Respond to of 12465

Re: 5/20/02 - AP: Disclosures pop up on SEC chairman's meetings with CEOs of companies under agency investigation Disclosures pop up on SEC chairman's meetings with CEOs of companies under agency investigation By Marcy Gordon ASSOCIATED PRESS May 20, 2002 WASHINGTON – Disclosures keep surfacing about private meetings between the head of the Securities and Exchange Commission and chief executives of companies being investigated by the agency. SEC Chairman Harvey Pitt represented Wall Street's big players as a private securities lawyer before President Bush named him last spring to head the market watchdog agency. He already has been criticized for his April meeting with the head of accounting firm KPMG, a former Pitt client whose audits of Xerox Corp. are being investigated by the SEC. Now it turns out Pitt also met, in December, with the CEO of Xerox, which agreed last month to pay a record $10 million civil fine to settle agency allegations of accounting fraud. In addition, Pitt reportedly has told SEC officials he spoke with tycoon Donald Trump before Trump's hotel and casino company agreed in January to settle with the SEC for allegedly making misleading statements in a news release about its earnings. The company was not fined. The Pitt-Trump conversation was reported Monday by The Wall Street Journal. Spokesmen for Trump at his New York office didn't immediately return a telephone call seeking comment. Pitt's meetings with company executives do not violate government ethics rules, but he held them against the advice of SEC staff attorneys. "These types of meetings clearly are inappropriate, but we take Mr. Pitt's word that it won't happen again," said Ken Johnson, spokesman for Rep. Billy Tauzin, R-La., chairman of the House Energy and Commerce Committee. "If it does, he won't find much political cover here on Capitol Hill," Johnson said Monday. Pitt told Tauzin and other lawmakers in a letter recently that he did nothing improper in his brief April 26 meeting with Eugene O'Kelly, chairman and chief executive officer of KPMG. They did not discuss Xerox or any enforcement matters, he said, but promised to act to avoid any appearance of impropriety in the future. The meeting was disclosed by O'Kelly in an e-mail to KPMG employees, in which he said he discussed with Pitt the SEC's investigation of the Xerox audits and said he told the SEC chairman that the agency should take no action. O'Kelly appeared to have backed off those statements in a recent letter to lawmakers, telling them he did not mention by name the SEC's inquiry into Xerox in his meeting with Pitt. SEC spokeswoman Christi Harlan didn't immediately return a telephone call seeking comment Monday. White House spokeswoman Anne Womack said, "The president thinks that Mr. Pitt is doing a great job as SEC chairman." He has adhered to ethics rules, Womack said. Pitt also met privately with O'Kelly's predecessor at KPMG, Stephen Butler, before Butler retired in April. That meeting was first reported Friday by the St. Petersburg Times. Butler referred queries to KPMG spokesman George Ledwith, who said the company had no comment. The issue of Pitt's meetings has become a distraction at a time when the SEC is pursuing the complex investigation of collapsed Enron Corp. and its former auditor, Arthur Andersen LLP, and is devising rules for companies in response to the Enron debacle. Some consumer groups and Democratic lawmakers have said the SEC proposals don't go far enough. The government watchdog group Common Cause recently demanded Pitt's resignation, citing what it called a pattern of actual and apparent conflicts of interest that undermines investor confidence. "It's a continuing distraction ... at a point where we can't afford to have the SEC chairman distracted," said Barbara Roper, director of investor protection for the Consumer Federation of America. "It has to affect (SEC) staff morale." SEC Commissioner Isaac Hunt, a Democrat originally appointed by former President Clinton, told The Wall Street Journal there is a "general practice" for commissioners not to meet with officials of companies under agency scrutiny. Pitt, Hunt and former accounting industry executive Cynthia Glassman are the commissioners now sitting on the five-member SEC. Before the flap over his meeting with the KPMG chairman, Pitt had been criticized by several Democrats in Congress and some ethics groups for not removing himself from the SEC's investigation of Enron and Andersen, another former Pitt client. He also has defended in Senate testimony his private meeting with accounting industry executives in December on a post-Enron reform proposal. As an attorney, Pitt represented major Wall Street brokerage firms, the New York Stock Exchange, all Big Five accounting firms, including KPMG and Andersen, and British insurer Lloyd's of London. signonsandiego.com