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Securities and Exchange Commission Chairman Harvey Pitt is looking for an able body to run the agency’s corporate finance division. The requirements, industry insiders say, include: someone who will loosen disclosure rules, ease up on restrictions for eligibility in public offerings and simplify the process of selling shares to the public. David Martin and his deputy, Michael McAlevey, announced Oct. 31 that they are stepping down from the SEC’s corporate finance division, the agency’s second-largest division. Corporate finance reviews documents public companies are required to file, including those necessary for mergers and acquisitions and initial public offerings. While SEC officials decline to comment on when new appointments might be made, John Coffee, a law professor at Columbia University in New York, said he thought they might come later this month. Coffee said that one candidate to replace Martin might well be Stanley Keller, a partner at Boston law firm Palmer & Dodge. Keller, he said, favors a series of recommendations by the business law section of the American Bar Association that would, among other things, make it easier for companies to sell shares to the public. “Pitt will probably pick someone who is sympathetic to the ABA recommendations,” Coffee said. “Keller is close to Pitt and could be a candidate.” Keller did not return phone calls Nov. 1. William Williams, Jr., a partner at law firm Sullivan & Cromwell in New York, said that Pitt will probably pick someone supportive of many of the ideas in the ABA proposal, but not necessarily familiar with it. Many industry insiders say the ABA proposals resemble the so-called “aircraft carrier,” the SEC’s 500-page registration modernization proposal, which was unveiled in 1998 and quietly killed in March 2000. Williams argued that Pitt would want an appointee to streamline the share registration process and allow more disclosure options. Naming a new division chief gives the SEC a chance to take a new look at several corporate finance issues, observers say. Under former Chairman Arthur Levitt, the SEC focused on accounting issues, enforcement actions and market structure matters. Pitt “clearly has interests in a number of issues that bear on corporate finance,” said Joel Seligman, a securities law historian and dean of the Washington University School of Law in St. Louis. “At this point in time, these matters are terribly important.” Priorities include facilitating access to capital markets; making it easier for technology, namely the Internet, to be used in raising capital; and bringing the current disclosure system up to date. “The SEC doesn’t consider putting some financial information on a Web site an acceptable form of public dissemination of information,” Williams said. “The new corporate finance director will probably push to make the Internet a real part of public disclosure.” Coffee said the new director will work to make road shows more widely available. “Electronic road shows will most likely be something a new director of the corporate finance division will try to install,” he said. James Doty, a senior partner at Baker Botts in Washington, D.C., and a former SEC general counsel, said Web-enabled techniques will be high on the agenda of whomever Pitt picks for corporate finance. “There’s going to be a big push to develop the system and technology to get companies to submit financial information more often than their quarterly reports and the financial information will be available more readily on the Internet,” Doty said. Copyright (c)2001 TDD, LLC. All rights reserved.

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