Pitt Meeting Reopens Conflict Issue

Top U.S. markets regulator Harvey Pitt--dogged by controversy over a private meeting with the head of an accounting firm that once employed him and that is under investigation by his agency--said Monday that he would now think twice about holding such sessions.

On April 26, Securities and Exchange Commission Chairman Pitt met with the head of KPMG , a Big Five firm being probed by the SEC for audit work at Xerox Corp.

KPMG was a client of Pitt’s when he was a corporate lawyer.

Reopening nagging questions about his judgment and his close ties to an embattled industry he now polices, the session was the first time Pitt met Eugene O’Kelly, who became KPMG chairman and chief executive last week.

Calling the brief conference merely an introductory courtesy call, Pitt said in a statement: “Neither Mr. O’Kelly nor I discussed any enforcement matter, including Xerox.”

But O’Kelly, in a separate statement, said he did raise the topic with Pitt: “I referenced a potential proceeding against KPMG at the very end of our meeting and that KPMG would take all necessary steps to protect our firm and its reputation.”

SEC spokeswoman Christi Harlan said Pitt agreed to the meeting with O’Kelly only after establishing ground rules putting enforcement issues off-limits.