Securities and Exchange Com-mission Chairman Harvey Pitt's resignation leaves President George W. Bush seeking a leader who can restore investor confidence in US markets after a year of corporate scandals.
Possible successors include former NASDAQ Stock Market Chairman Frank Zarb, former federal judge Stanley Sporkin, Bush family attorney James Doty, and ex-New York Mayor Rudolph Giuliani, according to lawmakers and former SEC officials.
PHOTO: AFP
Pitt's surprise election-night resignation followed mounting criticism from Democratic and Republican members of Congress for his failure to alert fellow SEC commissioners that former FBI Director William Webster, chosen to lead a new accounting oversight board, had been chairman of the audit committee of a company accused in civil suits of accounting fraud.
"It's time to move on and get a new effective leader who is perceived as objective, fair and reform-minded," said Charles Mulford, a professor of accounting at the Georgia Institute of Technology in Atlanta.
Webster's resignation as chairman of the Public Company Accounting Oversight Board now appears inevitable, said William Fleckenstein, president of Fleckenstein Capital, an investment firm in Issaquah, Washington.
Webster said on Monday that he was considering resigning from the board. "I always said I would step down if I felt [my presence] would impair the work of the board in getting it going," he said.
Pitt's resignation leaves the SEC in disarray as the regulatory agency tries to tighten scrutiny of US companies after accounting scandals at Enron Corp, WorldCom Inc and other companies.
Pitt, who called his senior staff members about 9pm to notify them of his decision, said he was relieved to have made the decision, according to people knowledgeable about the situation.
Pitt told the White House that he will leave as soon as he can "ensure a smooth transition" and he was expected to preside over an open meeting at the agency yesterday.
"Unfortunately, the turmoil surrounding my chairmanship and the agency makes it very difficult for the commissioners and dedicated SEC staff to perform their critical assignments," Pitt wrote to Bush. "Rather than be a burden to you or the agency, I feel it is in everyone's best interest if I step aside now." Pitt's wife, Sari Pitt, answered a telephone call to their home in Washington. "We're doing great," she said. "We're so busy right now I can't talk. There are so many family and friends we're trying to reach."
Senator Jon Corzine, a New Jersey Democrat, said Giuliani would be "a great SEC chairman."
Ed Fleischman, a former SEC commissioner, said Doty "is a very inside D.C. person with a Texas connection." Doty, a partner with Baker Botts in Washington, re-presented Bush when he ran the Texas Rangers professional baseball team in the late 1980s.
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