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SEC spring-cleaning drive set to take off

Washington, Aug. 26 (Reuters): Corporate governance and accounting reform in America will be on the front burner on Tuesday, as new faces at the Securities and Exchange Commission and chairman Harvey Pitt begin implementing the landmark Sarbanes-Oxley Act to clean up big business. The most far-reaching remake of US securities laws since the 1930s, the legislation calls for many changes during the next year, including regular certification by top corporate officers of financial results and faster disclosure of corporate insider trading.

Both these sections of Sarbanes-Oxley will be considered on Tuesday at the SEC’s first public meeting with three new members: Harvey Goldschmid, Paul Atkins and Roel Campos.

As a series of corporate scandals ranging from Enron to WorldCom shook US markets over the last 12 months, Pitt, a former elite Wall Street lawyer, spent most of his first year in office coping virtually alone with the crisis.

After winning praise for helping restore the stock markets after the September 11 attacks, Pitt took heavy fire for his handling of relations with past clients, leading some lawmakers from both sides of the aisle in Congress to call for his resignation.

The new commissioners will give Pitt needed political cover, lawyers said, and help share the load as the SEC hammers out the details of reforms drafted by Democratic Maryland Sen. Paul Sarbanes and Republican Ohio Rep. Michael Oxley, and signed into law by President Bush on July 30.

“It’s been a long time since there’s been a full commission and since there’s been one with such a range of experience and viewpoints,” said Gregory Bruch, partner at the law firm of Foley & Lardner in Washington and a former top SEC lawyer.

“It’s clearly a much stronger agency when you have a full complement of five commissioners, who are a mix of Democrats and Republicans. It makes the SEC much less susceptible to being accused of engaging in partisan politics.”

Republicans Pitt and Cynthia Glassman, an economist who came aboard this summer, will be joined by Atkins, another Republican lawyer, as well as two Democrats—law school professor Goldschmid and broadcasting executive Campos.

The new-look SEC is under siege by corporate lobbyists trying to influence how it implements the quickly approved Sarbanes-Oxley legislation. Some lawyers estimated the SEC in the next year must adopt 24 new sets of rules.

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