Embattled SEC
Chairman Pitt Resigns

By Steve Holland

WASHINGTON (Reuters) - Harvey Pitt, the embattled chairman of the U.S. Securities and Exchange Commission, resigned on Tuesday night, citing the turmoil surrounding his tenure.
Pitt has been engulfed in controversy since he took over as chairman of the securities watchdog 15 months ago.
He came under heavy fire this week for failing to tell SEC commissioners -- and the White House -- that his choice to head a new accounting board, William Webster, was a director and audit committee chairman of a company facing accusations of fraud in lawsuits.
"It is with deep regret that I have decided to tender my resignation to you as chairman, and a member, of the Securities and Exchange Commission, effective as soon as I can help your staff ensure a smooth transition of leadership," Pitt said in a letter to President Bush.
White House spokeswoman Claire Buchan said Bush accepted Pitt's resignation. "We did have indications he was considering this over the last couple of days," Buchan said.
In his letter, Pitt said: "Unfortunately the turmoil surrounding my chairmanship and the agency makes it very difficult for the commissioners and dedicated SEC staffers to perform their critical assignments. Rather than be a burden to you or the agency, I feel it is in everyone's best interest if I step aside now, to allow the agency to continue the important efforts we have started."
SEC spokeswoman Christi Harlan said of Pitt: "He has tendered his resignation to the president. He'll stay on through a transition."
She said no interim chairman has been named to replace Pitt. Possible successors could include a former top SEC lawyer James Doty, corporate lawyer Gary Lynch or former federal judge Stanley Sporkin, sources said earlier this week.
A spokeswoman for Senate Majority Leader Tom Daschle, a South Dakota Democrat, said Pitt had done the right thing by stepping down.
"Senator Daschle has called for this for quite some time," said Daschle spokeswoman Ranit Schmelzer. "We think it's appropriate that he stepped down, and now we hope they will replace him with someone who is a true steward of the SEC."
The announcement that Pitt would step down came as Bush was watching Election Day television returns.
Pitt's resignation came after White House officials lost confidence in him amid the new controversy over the accounting board, which was set up to crack down on auditors and bolster market confidence after a rash of business scandals that started last fall with energy trader Enron Corp. .
On Oct. 25, with the support of Pitt and two other Republican SEC commissioners, the 78-year-old Webster won a bitterly split, 3-2 party-line SEC vote to become the first chairman of the Public Company Accounting Oversight Board.
Six days after the vote, it emerged that Webster had been the audit committee chairman of U.S. Technologies Inc, a small, Washington-based company that is facing accusations of fraud.
The accounting board controversy was not Pitt's first brush with trouble. Last summer, White House officials made clear their displeasure with him when he sought a pay raise and a promotion.
Pitt canceled a speech in New York earlier on Tuesday, and was slated to speak at the Securities Industry Association annual meeting on Friday. Also, on Wednesday Pitt was slated to preside over an open meeting at the SEC to consider new rules for corporate attorneys.


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