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SEC Chairman Harvey Pitt resigns
By Rex Nutting, CBS.MarketWatch.com
Last Update: 9:59 PM ET Nov. 5, 2002







WASHINGTON (CBS.MW) - Embattled SEC Chairman Harvey Pitt resigned late Tuesday, White House officials said.



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Pitt submitted his resignation letter to President Bush Tuesday afternoon, even as election returns dominated news coverage.

Read the text of Pitt's resignation letter.

The resignation capped a tumultuous year in office for Pitt, which saw a wave of corporate scandals sink Wall Street shares and investor confidence.

Pitt's controversial tenure at the SEC hit a fever pitch last week when it was reported that he neglected to tell SEC governors that William Webster, his candidate to run the agency's new accounting oversight board, had been involved in a fraud probe a few years ago.

His troubles were compounded by a recent study that shows public faith in the SEC is at an all-time low.

Pitt was a controversial choice from almost the beginning. He purposely distinguished himself from his predecessor, Arthur Levitt, by promising a "kindler, gentler" SEC in his very first public speech.

Pitt's troubles mounted when accounting and corporate governance scandals rocked Wall Street. While Congress dithered over reform legislation, Pitt insisted that the SEC could restore investor confidence without new laws.

Pitt also raised hackles when he met with former clients who were subjects of SEC investigations.

As calls for his resignation mounted, Pitt seemed to dig his heels in. He strongly denied that he had been unduly influenced by the lobbyists for the accounting industry in the selecting Webster for the audit board and denied that he had offered and then withdrawn the job to John Biggs of TIAA-CREF.

The final straw came Monday, when it was revealed that Pitt had withheld potentially damaging information about Webster's past from his fellow commissioners.

Pitt had insisted all along that he was the toughest possible regulator for the accounting and securities industries. He had worked as the general counsel for the SEC before switching sides to represent accounting and securities interests. He joked that he knew where all the "bodies were buried."

Under Pitt, enforcement actions against corporate wrongdoers had increased. His agency was part of a Corporate Fraud Task Force that has brought indictments against more than a dozen corporate leaders, including leaders at Enron, WorldCom, Adelphia, Andersen and Tyco.

Top Democrats, including Senate Majority Leader Tom Daschle, House Minority Leader Dick Gephardt and Senate Banking Committee Chairman Paul Sarbanes had called for Pitt's resignation. After the Webster fiasco, Republicans such as Sen. Mike Enzi, the only accountant in the Senate, joined maverick John McCain in publicly criticizing Pitt.

It was obvious that the end was near when the powerful U.S. Chamber of Commerce withdrew its support.

It was not immediately clear whether Bush sought Pitt's resignation, the Associated Press reported. Officials did not reveal who will replace Pitt.

Rex Nutting is Washington bureau chief of CBS.MarketWatch.com.

http://cbs.marketwatch.com/news/story.asp?guid=%7BF850EB64%2DFE52%2D4BDB%2D8A7E%2DC86BA8B7453E%7D&am....


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