SEC Chief Promises to Get Tough

WASHINGTON (Reuters) - Top U.S. financial market regulator, Harvey Pitt, on Sunday promised to get tough with corporate America as it tries to win back investor confidence after a string of accounting scandals, and said politics would not stand in his way.


Pitt's comments came after a week of turmoil in world financial markets rocked by revelations that telecoms giant WorldCom Inc., had hidden $3.85 billion in expenses.

He also warned there may be further punishment for Xerox Corp., another company embroiled in accounting irregularities, and said corporations with political ties like oil and energy giant Haliburton Co. would not be escape regulators' attention if mistakes are found to have been made. "People are going to pay heavily," the Securities and Exchange Commission ( news - web sites) Chairman said on ABC's This Week show.

The string of scandals, that kicked off with the collapse of Texas-based energy giant, Enron Corp., has put the cleanup of corporate America back on the political agenda. President Bush ( news - web sites) injected a new note of urgency to the subject last week by denouncing corporate "fudges" and Congress is preparing a bill that would impose tough new oversight on the U.S. accounting profession.

On Saturday, U.S. President, George W. Bush, in his weekly radio address, called for rules and laws to "restore faith in the integrity of American business." He added that no violation of the public's trust will be tolerated, and the federal government would remain vigilant in prosecuting wrongdoers .

Xerox rattled already unnerved investors last week by restating five years of results to reclassify more than $6 billion in revenues. The SEC had already fined the copying company $10 million in April after it admitted misappropriating about $3 billion in revenues, but Pitt warned that discovery of this latest and much larger number could mean more fines.

"We're not finished with the Xerox case...we knew there were problems," he said. "We told this company, not only must you disclose and restate what we know, we want to know everything. And that's what they've now done. And now those who are responsible will pay."