The move had been widely expected following the departure of Pitt, who had brought Herdman into the SEC, and it transpired that the accountant also played a significant part in the controversial appointment of William Webster as head of the accountancy oversight board.

It has been revealed that Webster, a former head of CIA, told both Pitt and Herdman that he had been head of the audit committee of a company under financial investigation. Both decided to carry on with the proposed appointment without telling the other four SEC commissioners eligible to vote on the appointment about the matter.

Webster's position is also under threat following revelations that he fired auditor BDO Seidman after it had warned about financial problems at US Technologies, whilst on the audit committee of the company.