Speaking at a Senate Banking Committee confirmation hearing, Pitt said: ‘I would like the SEC to lead a review of the requirements it administers, and the regulations it imposes, to be certain they are sound, reasonable, cost-effective and that they promote competition.’
Pitt, a corporate lawyer, and general counsel to the SEC in the late 1970s said the current set of rules were almost 70 years old, dating back to the Wall Street crash of 1929, and were difficult to understand.
As the SEC’s enforcement agency cracks down on companies manipulating earnings to meet analyst expectations, Pitt promised to ‘vigilantly enforce rules protecting investors’.
The 56-year-old said he supported in principle the ‘Regulation FD’ rule, which prohibits corporations from releasing information to analysts, mutual funds and pension funds ahead of the investing public.
He refrained from criticising his predecessor Arthur Levitt who led a crusade for greater auditor independence, but his comments suggest he will adopt a far more conservative approach to law-making. Acting SEC chief Laura Unger has expressed concern that of number of firms offering both audit and non-audit work are greater than regulators suspected.
Pitt’s testimony was well received by the Senate panel, signalling that his confirmation as SEC chairman is virtually assured.
Concerns have been raised, however, that Pitt’s background as a high-profile lawyer may conflict with his role as America’s most senior regulator.
Pitt earned $3m (Pounds 2.1m) plus last year in his securities practice at the Washington law firm Fried, Frank, Harris, Shriver & Jacobson. His clients included all the Big Five accounting firms, Lloyds of London and the New York Stock Exchange.
To calm fears, he has promised to cash in all his company shares. And Pitt will take a 95% pay cut. If his nomination succeeds, He will earn $133,000 (Pounds 93,000) a year.
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