As Expected, Bush Names Pitt Chairman of the SEC

WASHINGTON — President Bush on Thursday officially nominated Harvey L. Pitt, one of the nation’s leading securities lawyers, to be chairman of the Securities and Exchange Commission.

The decision, which had been expected since early this week, caps a lengthy search by the Bush administration to fill the position of the nation’s top securities cop.

If confirmed by the Senate, the 56-year-old Pitt would replace Arthur Levitt, who resigned in February after a record 7 1/2 years at the helm of the agency.

Pitt, as chairman, would face questions about continuing some of Levitt’s investor-protection policies, including the new SEC rule forbidding selective disclosure of company news.

Bush’s choice has sparked some concern among consumer representatives, because Pitt, as a partner at the law firm of Fried, Frank, Harris, Shriver & Jacobson in Washington, has represented a number of prominent corporate and individual clients who have crossed swords with the SEC.

Sen. Chris Dodd (D-Conn.) said he expects Pitt to be asked in Senate hearings about his affiliations and loyalties. “He has a very, very diverse client portfolio, but he’s certainly highly recommended by a lot of people,” Dodd said.

Pitt “has a detailed knowledge of securities regulations and markets,” said Senate Banking Committee Chairman Phil Gramm (R-Texas).

Pitt would serve the remainder of Levitt’s five-year term, through June 2003, and then could be reappointed to an additional term. The job pays $133,700 a year.

During the 1970s, Pitt was SEC general counsel, the agency’s top legal position, before going into private practice.

Pitt, as chairman, isn’t likely to have to recuse himself often from SEC decisions because of possible conflicts of interest with clients he represented, former SEC general counsel Simon Lorne said.

Pitt won’t face possible conflicts on policy decisions because their impact is across the market rather than on a specific firm, said Lorne, a partner with Munger, Tolles & Olson in Los Angeles.