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SEC Enforcement Chief to Leave Agency

Regulation: Richard H. Walker bolstered fight against Internet and accounting fraud.

July 11, 2001|From Bloomberg News

Securities and Exchange Commission enforcement chief Richard H. Walker, who has directed the agency's fight against accounting and Internet fraud, is leaving the government after 10 years in senior SEC jobs.

Walker, 50, announced his resignation Tuesday, as Washington lawyer Harvey Pitt's nomination as SEC chairman was sent to Congress by the Bush administration.

If approved by the Senate, Pitt, a Republican, would replace Democrat Arthur Levitt, who resigned in February. Levitt named Walker to the enforcement post.

"I had a list of things I wanted to accomplish and feel good about, and I've done that," Walker said in an interview.

Under Walker, the SEC filed accounting-fraud cases against Sunbeam Corp. and its former chairman, Albert Dunlap; Arthur Andersen and MicroStrategy Inc., among others.

The agency currently is probing accounting irregularities at Xerox Corp., ConAgra Foods Inc. and Lucent Technologies Inc.

The SEC hasn't named a replacement, nor has Walker accepted a job outside government, the agency said. Walker, who has been the agency's top law-enforcement official for three years, said he plans to stay on for about another month.

"Dick knows that under Pitt, who's an expert in securities enforcement, he won't have the discretion he had in the past," said John Coffee, professor of law at Columbia University. Walker has been "one of the most effective SEC enforcement directors ever, and given the low compensation of government work, it's a wonder he lasted this long."

Walker makes $133,700 a year as enforcement director, a job he has held since May 1998, SEC spokesman John Heine said. Earlier, Walker worked as the SEC's general counsel and the head of its New York regional office during a decade with the agency.

Pitt, 56, declined to comment on a possible replacement.

"Dick's successor faces the challenge of continuing the tasks he started, from stopping the proliferation of Internet and accounting fraud to motivating and recruiting good people to reduce turnover," Levitt said.

Walker pioneered the SEC's quick-response approach to Internet stock fraud and made accounting fraud the agency's top enforcement priority. He formed units devoted to each.

Walker said his successor will have to make decisions on a number of active investigations involving financial results reported by large companies and the international accounting firms that audit them. The SEC is looking into about 40 large companies and their senior executives.

Levitt and Walker both have argued that accounting fraud threatens investors' trust in the capitalist system.

Walker also brought swift, high-profile cases against dozens of Web promoters, brokers and companies at a time. The SEC has filed more than 200 Internet fraud cases this year, up from 44 in 1998, the year Walker became enforcement chief.

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