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May 31, 1998

Arthur Levitt Rides Again The Life and Times of a Lousy Actor

By Jim Cassidy

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In 1986, Arthur Levitt Jr., then 55, made his motion-picture debut. He was cast as a Patriot in Sweet Liberty, a comedy about the making of a movie on the American Revolution, starring Alan Alda.

Alda played a dusty college professor whose career takes an unexpected turn when his book about the historic events is made into a Hollywood movie. Levitt's big moment came as an extra on location in a small collage town.

The American Patriots were standing in formation facing the British Redcoats in a big battle scene. With cameras rolling, the Redcoats opened fire, fatally wounding a Patriot. The Patriot collapsed, releasing a half-animal scream.

That was the living voice of Levitt, then the chairman of the American Stock Exchange, now the debonair public servant who this month starts his second term as chairman of the Securities and Exchange Commission.

By most accounts, Levitt is a lousy actor.

"He played the part [in Sweet Liberty] of somebody overacting," recalled Alda, a personal friend and tennis partner of Levitt's since their first meeting, years before on a summer vacation. "He was particularly well suited for the role."

By other accounts, Levitt is a first-rate politician.

"He's a builder, a deal maker and a very good manager," said former SEC Commissioner Richard Roberts, who served under Levitt before stepping down in August 1995.

Roberts, now an attorney at Reid & Priest in Washington, said Levitt had a teamwork approach, but made it clear who was the leader.

After an industry agreement was reached in 1994 to ban "pay-to-play" political contributions by large underwriters in exchange for lucrative municipal-bond business, Thomas A. Russo, chief legal officer at New York-based Lehman Brothers, remarked on Levitt's ability "to get everyone together in the same room and behind a proposal."

"He's a macro rather than a micro person," added Edward Fleischman, an SEC Commissioner from 1986 to 1992, just before Levitt took office, and now an attorney at Linklaters & Paines in New York. "He relies a lot on staff advice for the micro decisions. On the macro issues though, he's his own man."

"Someone like me, with views that were not considered traditional at the agency, not only got a fair hearing, but ultimately won the day in many cases," recalled Steven Wallman, an SEC Commissioner under Levitt from 1994 to 1997.

"If you wanted to have the opportunity to discuss something [with Levitt], he was always there," added Wallman, now a senior fellow at the Brookings Institution. "There was never, I don't want to talk about something' or I don't have time.' The time would always be made available."

Indeed, Levitt's time may break records. He will make history by becoming the longest-serving SEC chairman even before he completes his new five-year term, which expires on June 5, 2003. But how history will judge Levitt is a matter of some debate.

Protecting the investing public is a priority for Levitt, and investor groups generally applaud his efforts. Levitt waged war on shady dealings in the bond markets and indirectly confronted the Mafia on small-cap fraud.