SEC Chairman Wants to Shift Focus
The new Securities and Exchange Commission chairman, Harvey Pitt, is intent on shifting the focus of the SEC from prosecuting corporate financial fraud to improving financial disclosure.
"I believe violations of law, if they occurred, have to be pursued with vigor," said Mr. Pitt," but I'm more concerned about protecting investors before violations occur."
Mr. Pitt has indicated he believes the SEC's first obligation is to make companies' quarterly and annual reports of profits and revenue "more relevant and timely and understandable for investors."
Investor advocate Barbara Roper of the Consumer Federation of America expressed concern about the shift from focusing on corporate and accounting fraud: "There's a real danger that companies will interpret Mr. Pitt's remarks as a wink and a nod and that they'll start testing where the legal line is."