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Harvey L. Pitt, President Bush’s nominee for chairman of the Securities and Exchange Commission, said Thursday he wants the regulatory agency to lead a broad review of federal securities laws to simplify and modernize them. Pitt announced the initiative during his more than two-hour confirmation hearing before the Senate Banking Committee. Likening federal securities laws to the Internal Revenue Code in its complexity, the candidate said the review would ensure that laws are “sound, reasonable, cost-effective and promote competition.” But while Pitt outlined a laundry list of concerns, he stopped short of saying he would seek to overturn any standing rules or regulations. Bush formally nominated Pitt, 56, to the SEC last week. He is a partner in the Washington, D.C., office of Fried, Frank, Harris, Shriver & Jacobson, where he has represented securities industry trade groups and companies in disputes with the SEC. Before going into private practice, he was SEC general counsel from 1975 to 1978. Among his other proposals, Pitt said Thursday he is interested in instituting what he termed “real-time” enforcement against securities law violations. Several lawmakers expressed concern about the lag — sometimes as long as five years — between the time a company is convicted of wrongdoing and when it is punished by the SEC. “Bringing cases long after companies may have declared bankruptcy or investors have lost millions really doesn’t help anything,” Pitt said. Additionally, Pitt said he wants to undo the widespread industry perception of the SEC as an adversary by working more closely with securities firms and lawmakers. Pitt also said he does not have any immediate goals to overturn any rules instituted during the tenure of his immediate predecessor, Arthur Levitt, who stepped down in February after nearly eight years at the helm of the regulator. By the same token, Pitt added, “There are no rules that should be off of the table.” During the hearing, Pitt tried to allay concerns that his career as a high-profile securities industry lawyer would bias him at the expense of individual investors. “I haven’t worked this hard for 30 years to risk my reputation by doing anything other than the public interest,” Pitt said. “I am trading very wonderful clients for the most wonderful client of all, the American investor.” “Many people … try to speculate based on his background whose guy Harvey Pitt is,” said Sen. Phil Gramm, R.-Texas, the ranking member on the banking committee. “And I think the plain answer is, he is his own guy.” The banking committee has not yet scheduled a vote on Pitt’s confirmation. Once it does so, it will forward its recommendation to the full Senate for a vote. Sen. Chuck Schumer, D-N.Y., said during the hearing that Pitt’s nomination is a “foregone conclusion.” If confirmed, Pitt would serve out the remaining years in a term formerly held by Paul Carey, who died last month after a long fight with cancer. The term expires in June 2002, and Pitt would serve for an additional five years. Copyright (c)2001 TDD, LLC. All rights reserved.

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