Arthur Levitt, chairman of the Securities and Exchange Commission and champion of individual investors’ rights, said yesterday that he’ll step down in February.
And the jockeying to replace him has already begun.
Levitt’s resignation represents the end of an era when more Americans than ever before became stock owners, and the SEC took steps to assure that they didn’t become victims of fraud.
“Levitt’s biggest contribution was that he was a tireless advocate of individual investors,” said Stephen Blumenthal, vice president of capital markets and trading for Charles Schwab & Co. “He was extremely effective and successful in making the SEC a more forceful defender of investors.”
Levitt, 69, has served as SEC chairman since first tapped by President Clinton in 1993. Though he said he has not yet decided what he will do next, he hinted that he may return to a career in newspaper publishing.
Before becoming SEC chairman, Levitt ran his own media company and published Roll Call.
As for his tenure at the SEC, Levitt said his biggest accomplishment was the creation of Regulation Fair Disclosure, a rule that requires public companies to disseminate news widely, rather than just to preferred Wall Street analysts.
“This rule puts individual investors on a level playing field with the pros,” Levitt told The Post yesterday.
He added that he was also proud of creating the Office of Investor Education and Assistance, which teaches investors how to protect themselves against fraudsters and criminals.
Levitt declined comment on who might succeed him. As he is delaying his departure until February, Levitt will be succeeded by a George W. Bush appointee.
Washington and Wall Street insiders said yesterday that there are a number of strong contenders for the job.
The front-runner is James Doty, an attorney. He is a partner in the firm led by Bush-advisor James Baker.
Another is Wendy Gramm, wife of Senator Phil Gramm.
The third is Harvey Pitt, another former SEC general counsel, now a senior partner at Fried, Frank, a Manhattan law firm. Campaign donation records show that he contributed $10,000 to the Republican National Committee this year, and $1,000 to Bush’s campaign.
J. Carter Beese Jr., an SEC commissioner during the administration of Bush’s father and now head of a venture capital company, is another contender.
Mary Schapiro, who currently heads the National Association of Securities Dealers regulatory unit, is also said to be in the running. The final contender being mentioned is Laura Ungar, the ranking Republican within the SEC, though insiders said she is the dark horse.
Levitt said he hopes his successor will continue his legacy of investor protection.
“There’s a lot that’s undone,” Levitt candidly admitted. “The area of market structure is constantly evolving, and that’s something the next commission will have to stay on top of. And mutual funds have become such an important way to participate in the market, yet many investors don’t know the fees they are paying or the tax implications of their mutual fund investments.”