SEC Chief Accountant Resigns Amidst Controversy
Securities and Exchange Commission (SEC) Chief Accountant Robert K. Herdman resigned last week effective immediately. He was criticized for his role in the controversial appointment of William Webster as the new Public Company Accounting Oversight Board (PCAOB) chairman.
Mr. Herdman, who was dubbed the "Anti-Regulation Regulator" by the New York Times, said he was stepping down "in light of recent events" and because the SEC was facing crucial decisions about accounting rules under the Sarbanes-Oxley corporate reform law. In his letter to SEC Chairman Harvey Pitt, he wrote, "The objectivity of those decisions will be enhanced if someone other than I functions as the Commission's principal adviser on accounting matters."
Earlier in his career, Mr. Herdman was vice chairman and senior technical partner at Ernst & Young. Chairman Pitt issued a statement, saying, "It is with profound regret that I accepted Robert Herdman's resignation this afternoon. His depth of experience made him the most qualified chief accountant in the agency's history. He has been a tremendous leader to his staff and a tremendous resource to the Commission."
But insiders say Chairman Pitt privately blames Mr. Herdman for the controversy surrounding Mr. Webster's appointment. Apparently, Mr. Herdman investigated Mr. Webster's handling of the U.S. Technologies audit committee incident and concluded it posed "no problem." He was criticized for not sending that assessment in a memo to the other four SEC Commissioners.
Sources say Mr. Herdman is not apologizing for any of his actions. In his letter to Chairman Pitt, he wrote, "It has been an honor to serve under your leadership. I regret that we did not accomplish all that we set out to do, but we did accomplish a great deal in a time that while short, was replete with unprecedented challenges."