SEC Chair Would Reexamine Fair Disclosure Rule

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Harvey Pitt, President Bush's selection for chairman of the Securities and Exchange commission, has indicated that, if confirmed, he would be willing to address the burdens placed on companies by Regulation Fair Disclosure (Reg FD).

Reg FD, one of former SEC chairman Arthur Levitt's pet projects, requires publicly held companies to provide information that could influence the purchase of shares simultaneously to every potential investor. Brokerage houses that used to receive advance information about companies' performance and other information, have asked for clarity as to exactly what kinds of information need to be imparted to all investors simultaneously.

Mr. Pitt has expressed his support of the purpose of Reg FD, which was designed to protect investors. "The underlying concept of Regulation FD is really unassailable, which is that no one should have an unfair advantage in the marketplace." Mr. Pitt has, however, agreed to examine complaints to determine whether, for example, companies may violate Reg FD if they simply confirm to brokerage houses that comments they made on the direction of earnings have not changed.

Mr. Pitt has also indicated that, if confirmed, he will examine all SEC rules to determine how they fit into today's economy. Many securities laws have been on the books for over half a century and reflect a time and technology that is "light years away from what we now confront daily," Mr. Pitt said.

Mr. Pitt is expected to be confirmed by the Senate quickly and, if confirmation occurs, could take over the SEC chairmanship within two weeks.


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