Levitt Call Prompts Move to Revise Rules

Sen. Carl Levin of Michigan plans to seek changes to government ethics rules after criticizing Securities and Exchange Commission Chairman Arthur Levitt for helping a subordinate get a senior job at Bear Stearns Cos. while the New York firm faced an SEC investigation. Levin, ranking Democrat on a Senate panel that oversees government ethics programs, wants rules to forbid an agency chief from initiating calls to help underlings find private-sector jobs, an aide said. Levin’s plan was sparked by concern about a call Levitt made to Bear Stearns Chief Executive James Cayne about possible job opportunities for Richard Lindsey, then the SEC’s market regulation director. Though an SEC ethics officer told Levitt the call wouldn’t be improper, Levin’s aide said the senator thinks the call from a top regulator to a regulated company created a bad appearance. Levin’s concerns were exacerbated by the fact that Bear Stearns’ clearing business--the unit that ultimately hired Lindsey--is the subject of investigations by the SEC and other federal and state agencies, the aide said. The SEC and New York and federal prosecutors have been investigating the clearing unit’s work in processing trades from the defunct A.R. Baron & Co. brokerage. A.R. Baron and former officials were charged with participating in a stock-manipulation scheme that defrauded investors. Levin’s questions about Levitt’s role were reported Wednesday by the Wall Street Journal.