(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.)

Webster Resigns from Accounting Board, Acting Chief Accountant Named

William Webster announced his resignation as chairman of the new Public Company Oversight Board on November 12, 2002. The announcement occurred less than three weeks after he was appointed to the board by a split SEC vote of 3-2. Mr. Webster did, however, preside over the board's first meeting on November 13, 2002, and indicated that he will remain with the board until an interim chairman is named.

The resignation came in the wake of claims that SEC Chairman Harvey Pitt had failed to tell the other SEC members that Mr. Webster had served on the audit committee of a company under SEC investigation. In his letter to Chairman Pitt, Mr. Webster stated that his "continued presence on the board will only generate more distractions. " Mr. Pitt, who submitted his resignation from the agency one week earlier, issued a statement in which he said that "I regret that Judge William Webster has chosen to resign as chairman of the Public Company Accounting Oversight Board." Sen. Paul Sarbanes, chairman of the Senate Banking Committee and co-sponsor of the Sarbanes-Oxley Act, added that the SEC "must act with wisdom and independence in the selection of a chairman of the oversight board."

Acting Chief Accountant Named

Chairman Pitt announced that the Commission unanimously selected Jackson M. Day to serve as acting chief accountant for the SEC. Mr. Day had previously served as the Commission's deputy chief accountant since September 2000. Prior to joining the Commission's staff, Mr. Day was a partner with Ernst & Young in New York City. He replaces Robert K. Herdman, who resigned on November 8, 2002, in connection with the criticism of the oversight board selection process.