New SEC Chief Has No Qualms About Sign-on Bonuses

Unlike former SEC Chairman Arthur Levitt, new SEC chief Harvey Pitt isn’t opposed to sign-on bonuses for retail brokers. In a press conference at the SIA’s annual gathering in Boca Raton, Fla. Friday morning, Pitt told RR that he thinks regulators ought to take a hands-off approach to broker compensation issues--including higher pay for fee business and sign-on bonuses--unless they directly conflict

Unlike former SEC Chairman Arthur Levitt, new SEC chief Harvey Pitt isn’t opposed to sign-on bonuses for retail brokers. In a press conference at the SIA’s annual gathering in Boca Raton, Fla. Friday morning, Pitt told RR that he thinks regulators ought to take a hands-off approach to broker compensation issues--including higher pay for fee business and sign-on bonuses--unless they directly conflict with the interests of investors. Pitt said it might be best to let the firms suffer the consequences when they overpay for brokers.

Also Friday morning, Allen Morgan Jr., incoming chairman of the Securities Industry Association, congratulated the industry’s retail brokers for their role in calming clients after Sept. 11.

“To me, the best illustration of earning the public’s trust and confidence were all the press reports of registered representatives working from makeshift quarters, calling clients just to reassure them that they were there to answer any questions,” Morgan said in a speech Friday, the final day of the SIA’s annual meeting. “The time you spend on this type of call, or setting up a college fund for a client’s new child, or mentoring a team of schoolchildren playing the Stock Market Game will be the best investment you can make.”

Along with some reflections on 2001, Morgan also offered his “Vision for 2002,” which was the title of his speech. The SIA’s priorities will include T+1 trade settlements and straight-through-processing, scheduled to go into effect in June 2005; anti-money-laundering efforts; the reduction of securities transaction fees and boosting salaries at the SEC.

Editor's note: For any comments regarding this article, or to suggest a story idea for RR Online or Registered Representative magazine, contact Editor in Chief Dan Jamieson at [email protected], Online Editor Rick Weinberg at [email protected], Online Managing Editor Cheryl Cooper at [email protected] or Senior Editor Michael Hayes at [email protected]

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