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April 1, 2002

Pitt's Full Disclosure Doubts

By Gregory Bresiger

SEC Chairman Harvey Pitt is a critic of Regulation Fair Disclosure (FD).

"My predecessor decided to pursue Reg FD, fair disclosure, which is not a disclosure regulation - it's an anti-disclosure regulation," Pitt said in a recent interview with BusinessWeek online.

The controversial rule that requires companies to provide key information to all public parties at the same time instead of a select group of insiders - is reducing the amount of financial information available. Pitt says that, "your best bet under FD is to say nothing to anyone."

Pitt's comments about FD reflect those of many analysts who have complained that, since the imposition of the rule, many company officials have been reluctant to speak with them for fear of violating it. Pitt's comments came up in connection with a discussion on audit independence and how to prevent a repeat of the Enron scandal.

Pitt, also profiled in a BusinessWeek cover story, said that he believes the accounting profession has been unfairly maligned in the scandal. And he would not call for a law that would ban accounting firms from providing simultaneous consulting and auditing services.