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SEC man says auditing failures cost trillions

The string of accounting failures at big companies in the past year has cost US households nearly US$60,000 each on average as some US$5 trillion in market value was lost, a member of the Securities and Exchange Commis-sion said Thursday.

They were "spectacular failures," SEC Commissioner Paul Atkins noted in a speech, ticking off the high-profile cases of Enron, WorldCom, Adelphia and Tyco International.

The embattled SEC -- whose chairman, Harvey Pitt, resigned under pressure last week -- is committed to protecting investors amid a crisis of public trust, Atkins said.

"We are working hard to be more vigorous, more aggressive," he told the Federalist Society, a conservative lawyers' group.

The White House, meanwhile, said it was pressing forward with its search for a successor to Pitt. "The president said he wants to move as quickly as possible," spokesman Scott McClellan said.

Assistant Attorney General Michael Chertoff has been among those rumored as possible successors, but he signaled strongly Thursday that he is unlikely to take over the top SEC post.

"Michael Chertoff is happy in the job he currently holds," said his spokesman, Bryan Sierra. "He looks forward to helping the president and the attorney general continue fighting the war against terrorism."

The Justice Department's criminal division, headed by Chertoff, has prosecuted a number of major corporate cases this year, and won the conviction of accounting firm Arthur Andersen on obstruction of justice for destroying Enron audit documents.

Atkins did not say how the estimated cost to Americans of the accounting scandals was derived. An aide later said he did not know the origin of the figures.

Referring to the turbulent time at the SEC in recent weeks, Atkins -- who has been there only three months -- said he constantly wonders, "What could possibly happen next?"

"For your information," he quipped, pointing to his suit jacket, "this jacket is lined with Kevlar. It's standard issue at the SEC these days."
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