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Pitt-stop

As Tony Blair jetted off to Moscow to shore up the global alliance against terrorism last week, SEC chairman Harvey Pitt was heading for Brussels to cement alliances in the war on corporate fraud.

In a speech to politicians, businessmen and accountants (including some of the most senior partners in the European arms of the Big Four) Pitt hinted at a number of important concessions.

Firstly he pledged to consider the impact of the Act on foreign investors.

And he said the SEC would ‘seek a better understanding of any conflicts that may exist’ with a foreign company’s domestic regulatory requirements.

But as for actual exemptions, no public offers were made.

Of course this verbal soothing was not driven solely by altruistic motives.

SEC chairmen rarely cross the Atlantic on goodwill missions – especially ones as embattled as Pitt currently finds himself.

What Pitt was there for was to urge foreign companies seeking a US listing not to be dissuaded by the obligations of Sarbanes-Oxley.

The statistics speak for themselves. In 1981 173 foreign companies were registered with the SEC. By 1991 that figure was 439, and by 2001 it was more than 1,300. The SEC wants to see that growth continue.

So, yes, Pitt’s European visit – it would have been a tour had he not cancelled London – was about winning over sceptics about the implications of Sarbanes-Oxley.

But it was also an international roadshow of the kind favoured by the larger investment banks. Pitt was here to sell the US as a future investment vehicle.

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