SEC replaces PCAOB board member with White House aide
The Securities and Exchange Commission has named Rebekah Goshorn Jurata, a special assistant to the president for financial policy on the White House’s National Economic Council, as a new board member at the Public Company Accounting Oversight Board, replacing Kathleen Hamm, whose short partial term expires this month, even though Hamm had expressed interest in being reappointed to a full term on the board.
Hamm was appointed to the PCAOB in December 2017 to fill out the remaining term of an outgoing PCAOB board member when the SEC chairman and commissioners decided to bring in a fresh new set of board members. She began serving in January 2018 and was eligible for another term on the PCAOB, which usually lasts five years. She said she wanted to serve a second term. However, in an unprecedented move, the SEC announced in June that it nevertheless would be opening up the job to other applicants while also keeping Hamm under consideration.
“I am seeking a second term to continue the important work I’ve started to protect investors and the public,” Hamm said in a statement forwarded by the PCAOB on Thursday evening to Accounting Today. “I’ve pressed for enhanced focus on emerging technology, cybersecurity, and the control systems that auditors use to ensure that they consistently deliver high quality audits. It has been my privilege to serve investors, the American public, and the SEC, over the past 21 months.”
She came to the PCAOB from Promontory Financial Group, where she was global leader of securities and fintech services and senior strategic adviser to the CEO on cyber solutions.
The Council of Institutional Investors sent a letter Wednesday to SEC Chairman Jay Clayton offering its support for Hamm being reappointed after reading about the controversy in a MarketWatch article last month by Francine McKenna. Another investor group, the CFA Institute, also offered its support for Hamm.
“Overall, we think the new board has been in place for a little over 18 months and that a new board member at this juncture would slow down progress on strategic initiatives,” said Sandra Peters, head of the Financial Reporting Policy Group at CFA Institute, in an email Thursday to Accounting Today. “We are keen for the PCAOB to make progress on its strategic plan and that Kathleen is a willing and capable member of the board who can contribute immediately.”
Nevertheless, the SEC opted for Jurata, who had worked as a counsel to former SEC Commissioner Daniel Gallagher before working for the House Financial Services Committee and later the Treasury Department and then as special assistant to the president for financial policy on the National Economic Council. She began her career as a staff attorney in the SEC’s Division of Trading and Markets where she focused on broker-dealer regulation.
“I am honored to continue to serve the public as a board member of the PCAOB,” Jurata stated. “I look forward to working with my fellow board members to protect investors and strengthen audit quality.”
She will be part of the PCAOB chaired by William D. Duhnke III, joining three other appointees who joined in the past two years: J. Robert Brown Jr., James Kaiser and Duane DesParte. The PCAOB board member position reportedly pays $500,000 per year.
“We are grateful for Board Member Hamm’s service to the board and her tireless efforts," said Duhnke. "We have benefitted from her perspectives and contributions, particularly as it relates to cybersecurity.”
“Rebekah brings significant public service experience, including at the SEC, and a deep understanding of our financial markets, that will complement the skills that Bill, Jay, Jim and Duane bring to the Board,” said Clayton in a statement Friday.
SEC Chief Accountant Sagar Teotia added, “We look forward to working with Rebekah to further the vital work of the PCAOB. Her understanding of our financial markets and international experience will benefit the PCAOB as it oversees the audits of public companies and brokers and dealers.”
Clayton extended his gratitude to Hamm for her service on the PCAOB. “I would like to thank Kathleen Hamm for her dedicated service as a member of the board,” he said in a statement Friday. “She brought increased focus at the PCAOB to emerging technology, cybersecurity, and the important role that auditor quality control systems play in ensuring consistent delivery of high quality audits.”
Teotia added, “I would also like to thank Kathleen Hamm for her dedicated service and her contributions to enhancing audit quality.”
While on the board, Hamm’s efforts focused on applying her technology expertise to upgrade and modernize the PCAOB’s approach to cybersecurity and emerging technologies at the PCAOB and among the audit firms it oversees.
“It has been my honor to serve investors and the American public at the PCAOB during this time of technological change and innovation, which has the potential to fundamentally improve the audit as well as the financial reporting process itself,” said Hamm in a statement.