Bloomberg reports that US President George Bush looks set to ask for the resignation of Securities & Exchange Commission (SEC) boss Harvey Pitt as the controversy surrounding the selection of William Webster to run the new audit board looks likely to prove the final straw.
The SEC boss has been under fire by US lawmakers for several months now, since it first emerged that he met with Eugene O'Kelly, the KPMG chairman, at a time when the firm was under SEC investigation for its audit of Xerox Corporation. Pitt had enjoyed a long association with KPMG before his time at the SEC.
Pitt's judgement is being questionned again over the Webster affair. Webster has recently been announced as the head of a new audit regulator which will oversee the accounting profession in the US and has been established to restore investor confidence and hopefully prevent any further major corporate scandals.
It has now emerged that Webster was head of the audit panel of US Technologies, a company that has itself been accused of fraud. Although there is no suggestion that Webster was in any way involved in the alleged fraud and, indeed, he is believed to have fully disclosed the matter to those at the SEC who interviewed him, nevertheless US lawmakers are concerned that the appointment is simply sending out the wrong message and are believed to be demanding Pitt's head.