Securities and Exchange Commission (SEC) Chairman Harvey Pitt defended his integrity and scored points with investors at the Commission's first Webcast Investor Summit on May 10, 2002.
Most questions asked at the summit were well-focused on the issues of the times, including Web-based financial reporting. Some were answered by Commissioners Cynthia Glassman and Isaac Hunt or Chief Accountant Robert Herdman. For example, one email questioned the validity of disclaimers used by companies when providing access to SEC filings through links to the Web sites of EDGAR providers. Commissioner Hunt clarified, "The '33 and '34 Acts which we administer make it a violation of law if any registrants put untrue or misleading information on their Web sites. I think that perusing the official Web site of a particular company is probably the best source of accurate information."
A few questions were deliberately barbed, since the event followed a blistering editorial in the Financial Times that faulted the SEC's rule proposals for governing the accounting profession as "weak and ill-suited to deal with the problems thrown up by the Andersen debacle." The "Common Cause," a consumer advocate group, went so far as to call for Chairman Pitt's resignation.
Although lawmakers and others see the criticism as relating more to his lack of experience in politics than his ability to protect investors, Chairman Pitt stepped up the issue. He chose to read aloud an email from C.A. that said, "With full understanding of Chairman Pitt's long-term association with the current pirates of Wall Street, I would have greater confidence in the actions of SEC if there was more representation and concern for the individual stock owner. Having the industry monitor or regulate itself is not an option that will work."
To laughter from the audience at SEC's headquarters, Chairman Pitt said dryly, "I think I'll try and answer that question." His response was both serious and credible: "When I turned in my private practitioner's hat and took on the position of the chairmanship, I took on the representation of the individual stock owner. Any past association or past affiliations have absolutely nothing to do with my intent to serve public investors."
The SEC plans to post a transcript of the summit to its Web site in the near future.