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.
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College
RSS