Newspaper article The Evening Standard (London, England)

Why America Needs a Hard Man to Police Markets; City Comment

Newspaper article The Evening Standard (London, England)

Why America Needs a Hard Man to Police Markets; City Comment

Article excerpt


HARVEY Pitt, the embattled chairman of America's Securities and Exchange Commission, must rue the day he uttered the infamous words about running a "kinder, gentler" SEC.

It would be unfair to keep bringing up that statement, made long before the 11 September terrorist attacks, before the corporate ethics scandal and before the US stock market's decline spread globally, were it not so telling about his trusting, affable nature.

Pitt has recently toughened up his public comments but still the agency in charge of regulating balance sheets is at the rearguard of most of the biggest corporate investigations. The New York Attorney General, the Justice Department and newspapers are leading the attack, uncovering possible transgressions almost daily.

A former Wall Street lawyer with many accounting clients, Pitt has had to excuse himself from important decisions because of his past business ties and, inexplicably, the most dramatic move he has made - ordering chief executives personally to certify that corporate financial statements are true and complete - was done quietly.

It took a fortnight for Wall Street to realise that the company earnings season, which starts next week, may bring a fresh wave of confessions as chief executives comply with the SEC's new rule.

President Bush has rebuffed calls to remove Pitt, but Presidents traditionally stand by their appointees, declaring full support even as they search for a replacement. Now that his own former oil industry dealings with regulators are political fodder, Bush has a personal reason to want an SEC chairman whose assurances will carry great weight.

It would not be surprising if Pitt stepped down. He is a decent, intelligent man, but America needs a top market cop with an unquestioned reputation for shrewdness, integrity and grit - a John Wayne, not a Jimmy Stewart. …

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