SEC chairman nominee Harvey Pitt faces severe conflicts of interest, according to legal experts.
In his 20-plus years in private legal practice, Pitt has represented Merrill Lynch, the NYSE and all of the big five accounting firms the SEC regulates.
The Senate will have to confirm Pitt, now a partner in the Washington, D.C., law firm of Fried Frank Harris Shriver & Jacobson.
Industry lawyers don't question Pitt's integrity, but legal conflicts could be troublesome.
Says Carol Langford of Langford & Bell, a Walnut Creek, Calif., law firm specializing in legal malpractice: “If he learned confidential information by his past representation at his private law firm that is material to the prosecution he's involved in, that's a violation. He can't do it. It's absolutely unethical.”
In a brief interview with RR, Pitt declined to comment.
Although the SEC chairman and commissioners do not actively participate in enforcement matters, they do approve formal investigations as well as develop and vote on rules.
Attorneys enjoy privileged communication with clients, and Pitt is bound to have dealt closely with firms' legal problems. But Wall Street is apparently unconcerned about how he might use that inside knowledge. The industry backs his nomination with Pitt receiving a public endorsement from the Securities Industry Association.
And one defense attorney says brokers should also support Pitt since he has represented individual brokers. “He appreciates how difficult it is for an individual broker and the realities of doing business,” the attorney says.
Meanwhile, at press time, Pitt's representation of another client was causing trouble. In 1999, he was retained by pornography Web site operator, New Frontier Media, in a securities matter, according to press reports.