Following the inevitable resignation of Securities and Exchange Commission Harvey Pitt on ironically, election night, the regulator finds itself a rudderless arm devoid of direction and rife with partisan intramural squabbling.
And if that’s not enough, a recent survey ranked the SEC dead last among 21 government agencies in terms of public trust.
And that’s the good news.
Surely to follow Pitt on his sojourn back to the far more lucrative private sector will probably be the agency’s chief accountant, Robert Herdman, and William Webster, the controversial pick to head the new Public Company Accounting Oversight Board. Both are inextricably tied to Pitt like knotted shoelaces and before too long will begin summarily cleaning out their desks.
The PCAOB incidentally, is scheduled to have its first meeting Nov. 14, which promises to be kind of a tricky exercise in logistics, given that the body has no office, no staff and by all accounts, no budget to speak of.
Meanwhile, the White House, imbued with renewed swagger at the GOP’s victory in winning control of the House and the Senate, will be charged with appointing a successor to Pitt. Only this time, don’t expect unanimous Senate confirmation as was the case with Pitt – after all, this is Washington and there’s got to be payback somehow.
And speaking of 1600 Pennsylvania Avenue, you know Dubya and crew are breathing easier given that Pitt voluntarily stepped down, given the series of backroom faux pas they’ve suffered as a result of the soon-to-be former chairman’s questionable actions over the past several months. That no doubt saved the President the trouble of phoning Pitt’s office and asking him to stop by if he’s got a minute.
While the White House continually stated they were standing behind their man, "We did not ask him to step aside," an administration official said, but even novice industry observers could
clearly discern GWB’s footprint on Pitt’s ample posterior.
In any event, the successor to Pitt had better come armed with credentials something on the order of a certain elderly Vatican City resident.
The problem for the Pitt’s successor and the agency in general is finding someone who could restore investor confidence and convince the public the regulator is serious about reform — not just an extension of a corporate lobbying arm.
After all, by the SEC’s admission they received roughly 450 nominations for the PCAOB including former SEC commissioners, securities lawyers and accountants.
It’s a safe bet that there are one or two in that group who could easily hang their nameplate where Pitt’s used to be.
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