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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (1191)	7/2/2002 3:20:34 PM
From: stockman_scott	Respond to of 89467

SEC chairman vows to fix 'crisis in confidence' By Greg Farrell USA TODAY Tue Jul 2, 1:27 PM ET Declaring that recent accounting scandals had spawned a ''genuine crisis in confidence'' in the nation's capital markets, Securities and Exchange Commission ( news - web sites) Chairman Harvey Pitt vowed Monday to fix the problem. In an interview with USA TODAY's editorial board, Pitt blamed WorldCom's top executives and its former auditors at Arthur Andersen for misleading investors. Last week, WorldCom fired CFO Scott Sullivan after revealing that Sullivan had used improper accounting to inflate the company's earnings by $3.9 billion. ''Unfortunately, it takes a village to produce an accounting fraud,'' Pitt said. ''We are looking for everyone who could have played a role in this, and if that means we have to sue and take action against the entire village, by God we will.'' Pitt, who made his name defending accounting firms before the SEC, brushed off suggestions that he was too close to his old clients and insisted that he was up to the task of restoring credibility to the stock market. ''I think I'm the right man'' for the job, Pitt said. He also spoke about: * Improving auditing of publicly owned companies. ''I believe what we are seeing is a very, very bizarre dereliction of duty on the part of the accounting profession, and I think we have a serious need for reform,'' Pitt said. ''There has to be some mechanism that assures us that the accounting firm itself feels the incentive to get it right,'' Pitt said. ''One of the problems I have with the present system was that there was no discipline, no quality control . . . that came from the profession itself.'' * New York attorney general Eliot Spitzer's investigation of Merrill Lynch analysts. After Spitzer discovered e-mail that revealed Merrill Lynch analysts privately denigrating stocks of the company's investment-banking clients even as they publicly touted them, Spitzer extracted a settlement from the brokerage firm and sparked criticism of the SEC for not moving first. ''It is incredibly offensive that people are suggesting that this is something that the SEC ignored or wasn't involved in or we came late to the party,'' he said. ''If somebody found fraud, I have no problem with any state official going after it. If somebody wants to restructure the industry, only the SEC or the self-regulatory bodies operating under our oversight can do it.'' * Releasing his appointment calendar. Pitt has been criticized for meeting with the top executive of accounting firm KPMG at a time when the auditing firm was under investigation for its role in Xerox's accounting problems. While Pitt has called for more transparency in the financial reporting of publicly traded companies, he said he would not give USA TODAY a list of people he has met with since joining the SEC last August. ''No SEC chairman has ever done what's suggested I do,'' Pitt said. ''I have never had a meeting I am ashamed I had. And I never will. When the head of XYZ Corp. comes to see me, and they have a significant problem that doesn't require immediate disclosure, I've got a difficult process here of what people will do when they see who I talk to and who I meet with. It really isn't in the public interest to create that kind of speculation, particularly in a time when the mere whiff of an SEC inquiry has produced wild gyrations in the market.''