Harvey Pitt, SEC chairman who resigned amid scandal, dies at age 78

Harvey Pitt, a legal prodigy who served as chairman of the Securities and Exchange Commission under President George W. Bush for just 18 months, died in Washington on Tuesday. He turned 78.

His death, in a hospital, came after a sudden illness, according to his family, who did not specify the condition.

Mr. Pitt’s career consisted of three consecutive stages, each of which could have been the highlight on a lesser resume. He began his career with the SEC and was promoted to general counsel at age 30, the youngest ever to reach that rank. After only three years, he left to represent corporate clients for the powerful law firm Fried Frank. There, rising to managing partner in the company’s Washington office, he helped it become wildly profitable.

He returned to the SEC as chairman in 2001, after passing a unanimous confirmation vote in which New York Democrat Senator Charles Schumer called him “the Zeus of the field.” Not long after, Mr. Pitt became somewhat of a household name for overseeing the rapid reopening of US stock markets after the September 11, 2001 attacks.

However, his popularity waned amid a series of corporate accounting scandals – most famously with the energy giant Enron – that brought renewed attention to his previous corporate work. Representatives from both sides questioned his interest in investigating private sector misconduct.

The final straw came when it emerged that he failed to tell the White House or his fellow SEC commissioners that an accounting board chairman he was defending headed the audit committee of a company accused of fraud. Under pressure, Mr Pitt resigned on election night in 2002.

Born on February 28, 1945 in Brooklyn, Harvey Lloyd Pitt was the child of Morris and Sara Pitt. His father was a vice president of the Waldbaum supermarket chain; his mother was a housewife.

Harvey, a fan of the Brooklyn Dodgers who was devastated when the team left for the West Coast, his family said, went on to earn degrees from Brooklyn College and St. John’s University before joining the SEC right out of college . It was the only job he had ever wanted.

In 1978, with a growing family, he went into private practice, representing some of the same people his organization should have regulated. His clients included Ivan Boesky, who pleaded guilty to insider trading during the junk bond scandal of the late 1980s, and numerous financial firms.

Such was his reputation that when Mr. Pitt’s own firm got into a minor legal squabble, his recruitment from the then smaller rival firm Williams & Connolly caused quite a stir.

“It was remarkable that if Harvey Pitt had faith in us, others would easily follow, and they did,” says Brendan Sullivan, a senior partner at Williams & Connolly.

At his confirmation hearing, Sen. Phil Gramm, Republican of Texas, offered an adaptation of a lyric by the British rock band Hermit’s Hermits: “Harvey Pitt has seen it both ways.”

He was tireless on the committee, said Cynthia Glassman, a former commissioner. After the group first received Blackberry smartphones, she said, Mr. Pitt “got big on emails, especially in the middle of the night.”

He took a lighter approach to SEC enforcement than his predecessors, telling Congress he would “repair relationships that have been damaged in the past.” That attitude proved untenable in the wake of Enron and other scandals.

“Your choice of words sends the wrong message to accountants, the SEC staff and the investing public,” Rep. John Dingell wrote to Mr. Pitt a few weeks after Enron’s collapse.

Morale within the agency plummeted during Mr. Pitt’s tenure, and a large number of senior employees left.

His fall in stature was summed up by a New York Times headline the day in 2003 his successor, William H. Donaldson, was confirmed: “SEC Choice Says He’s Not Harvey Pitt.”

But friends and former colleagues said Mr. Pitt had been unfairly criticized. Former SEC general counsel David Becker recalled being on the phone with Mr. Pitt when real estate developer Donald J. Trump called to complain about Trump companies being investigated for fraud.

“Harvey politely explained that he was in no position to help since he had added to the division’s proposal the same allegation of fraud that Trump called to complain about,” said Mr. Becker.

Mr. Pitt’s first marriage, to Phyllis Kay, ended in divorce in 1981. He married Saree Ruffin in 1984. His wife leaves him behind; two daughters, Emily Pitt and Sally Pitt Plowden; two sons, Jonathan and Rob; and three grandchildren.

In the years following his SEC presidency, Mr. Pitt barely disappeared from the public eye. He continued to address regulatory issues and occasionally wrote opinion articles for The Wall Street Journal.

Are most recent column took a sharp look at new proposed SEC rules for private investment funds.

“Too often, regulatory requirements make it difficult or impossible for new entrants to get to grips with an industry,” Mr. Pitt wrote. “There is often no voice at the table representing the interests of that segment of the industry.”