(The news featured below is a selection from the news covered in the Federal Securities Report Letter, which is distributed to subscribers of the Federal Securities Law Reports.)

SEC Chair Pitt, Chief Accountant Resign

Securities and Exchange Commission Chairman Harvey L. Pitt submitted his resignation to President Bush on November 5, 2002, and Robert K. Herdman, the SEC&'s chief accountant, also submitted his resignation from the agency. Mr. Pitt will remain at the Commission pending the selection of a successor, while Mr. Herdman's resignation was effective immediately.

The resignations occurred in the wake of the selection of William Webster to head the new public accounting oversight board established under the Sarbanes-Oxley Act. The Commission divided along party lines in approving Mr. Webster by a 3-2 vote, with Commissioners Goldschmid and Campos issuing dissenting opinions. Mr. Goldschmid had stated that "he was deeply saddened by the harm the Commission's selection process for the oversight board has done to this agency", while Commissioner Campos added that "it is not right that the Oversight Board should be born with the scar of its members having been subjected to the approval of the accounting lobby." Members of Congress have called for an investigation into the selection process.

Mr. Pitt was appointed and confirmed to serve as chairman by President Bush in August 2001. Prior to his appointment, he was a partner with the New York and Washington, D.C. firm of Fried, Frank, Harris, Shriver & Jacobson. He previously served as the SEC's general counsel before returning to private practice. Mr. Herdman, appointed in September 2001, had previously served as vice-chairman of Ernst & Young.