The head of the US' Securities and Exchange Commission met privately with the Xerox Corp chairman in December while the SEC was investigating the office-equipment maker for alleged accounting fraud, a company spokeswoman said Saturday.
Disclosure of SEC Chairman Harvey Pitt's meeting with the Xerox chief follows public criticism of his April meeting with the head of accounting firm KPMG -- whose audits of Xerox are being investigated by the SEC and which Pitt represented as a private securities lawyer.
SEC spokeswoman Christi Harlan, who declined comment on the meeting, said Pitt "has done nothing to breach his ethics requirements."
The government watchdog group Common Cause recently called on Pitt to resign, citing what it called "a pattern of actual and apparent conflict of interest ... [that] undermines citizen and investor confidence."
It would be very unusual, and generally considered improper, for an SEC chairman, who is the government's top securities regulator, to discuss a pending investigation with an executive of the company involved.
As a prominent attorney before President George W. Bush named him to head the SEC last spring, Pitt represented major Wall Street brokerage companies, the New York Stock Exchange, all Big Five accounting firms, including KPMG and Arther Andersen LLP, and British insurer Lloyd's of London.
The SEC sued Xerox last month in federal court, alleging that the blue chip company used a variety of what the government called "accounting tricks" and "accounting opportunities" to boost earnings by some US$1.5 billion and hide its true performance from investors.
Xerox agreed to pay a US$10 million civil penalty -- the biggest ever for alleged financial fraud by a publicly traded company -- and to revise financial statements back to 1997 to settle the SEC's allegations of accounting fraud by the world's largest copier company. Xerox, based in Stamford, Connecutict, neither admitted to nor denied wrongdoing in the settlement.
Pitt met on Dec. 7 with Xerox Chairman and Chief Executive Anne Mulcahy, at Mulcahy's request, Xerox spokeswoman Christa Carone said. Carone, who declined further comment, was confirming a report in Saturday's Washington Post.
The Post, citing unnamed sources, also said that Pitt agreed to the meeting against the advice of an SEC attorney. SEC staff told Mulcahy before the meeting that the agency's investigation of Xerox was off limits as a topic, but Mulcahy raised it anyway and Pitt listened to her but did not respond, according to the report.
Stephen Cutler, the SEC's enforcement director, told the Post that Pitt had supported an enforcement action against Xerox that was stronger than what agency attorneys first recommended.
In a recent letter to lawmakers who asked him for information about his meeting with KPMG's chairman and chief executive officer, Pitt said he has met with many company officials as part of his job but that he has always adhered to ethics rules.
Pitt said he did nothing improper in the brief meeting with Eugene O'Kelly on April 26 and did not discuss Xerox or any enforcement matters. He also promised to act to avoid any appearance of impropriety in the future.
Last week, O'Kelly appeared to have backed off his earlier statements, telling the lawmakers he did not mention by name the SEC's investigation of Xerox in his meeting with Pitt.
O'Kelly was more forceful in an e-mail sent recently to KPMG's employees, saying he discussed with Pitt the agency's investigation of the Xerox audits and said he told the SEC chairman that the agency should not take any action. His version of events conflicted with Pitt's.
NO HUMAN ERROR: After the incident, the Coast Guard Administration said it would obtain uncrewed aerial vehicles and vessels to boost its detection capacity Authorities would improve border control to prevent unlawful entry into Taiwan’s waters and safeguard national security, the Mainland Affairs Council (MAC) said yesterday after a Chinese man reached the nation’s coast on an inflatable boat, saying he “defected to freedom.” The man was found on a rubber boat when he was about to set foot on Taiwan at the estuary of Houkeng River (後坑溪) near Taiping Borough (太平) in New Taipei City’s Linkou District (林口), authorities said. The Coast Guard Administration’s (CGA) northern branch said it received a report at 6:30am yesterday morning from the New Taipei City Fire Department about a
IN BEIJING’S FAVOR: A China Coast Guard spokesperson said that the Chinese maritime police would continue to carry out law enforcement activities in waters it claims The Philippines withdrew its coast guard vessel from a South China Sea shoal that has recently been at the center of tensions with Beijing. BRP Teresa Magbanua “was compelled to return to port” from Sabina Shoal (Xianbin Shoal, 仙濱暗沙) due to bad weather, depleted supplies and the need to evacuate personnel requiring medical care, the Philippine Coast Guard (PCG) spokesman Jay Tarriela said yesterday in a post on X. The Philippine vessel “will be in tiptop shape to resume her mission” after it has been resupplied and repaired, Philippine Executive Secretary Lucas Bersamin, who heads the nation’s maritime council, said
REGIONAL STABILITY: Taipei thanked the Biden administration for authorizing its 16th sale of military goods and services to uphold Taiwan’s defense and safety The US Department of State has approved the sale of US$228 million of military goods and services to Taiwan, the US Department of Defense said on Monday. The state department “made a determination approving a possible Foreign Military Sale” to the Taipei Economic and Cultural Representative Office in the US for “return, repair and reshipment of spare parts and related equipment,” the defense department’s Defense Security Cooperation Agency said in a news release. Taiwan had requested the purchase of items and services which include the “return, repair and reshipment of classified and unclassified spare parts for aircraft and related equipment; US Government
More than 500 people on Saturday marched in New York in support of Taiwan’s entry to the UN, significantly more people than previous years. The march, coinciding with the ongoing 79th session of the UN General Assembly, comes close on the heels of growing international discourse regarding the meaning of UN Resolution 2758. Resolution 2758, adopted by the UN General Assembly in 1971, recognizes the People’s Republic of China (PRC) as the “only lawful representative of China.” It resulted in the Republic of China (ROC) losing its seat at the UN to the PRC. Taiwan has since been excluded from