The chairman of the Securities and Exchange Commission announced Wednesday that his agency has filed fraud charges against WorldCom Inc., a day after the company disclosed it had grossly overstated is profits in one of the largest accounting scandals ever.
Harvey Pitt also lashed out against congressional critics who questioned his leadership, and he defended his agency’s role in restoring confidence in America’s financial system.
Pitt also said he was directing the chief executive officers and chief financial officers of the largest 1,000 companies in the country to vouch for the accuracy of their financial statements.
Pitt stressed that the selection of the 1,000 largest companies was not intended to limit the scope of the agency’s scrutiny of corporate finances.
“No one is getting a pass,” he said.
The action filed Wednesday in federal court in New York was also aimed at preventing the destruction of documents by WorldCom while the SEC continues investigating, he said.
Earlier in the day, Sen. John McCain, R-Ariz., questioned whether the SEC can be effective under the leadership of Pitt, who represented big Wall Street brokerages and major accounting firms as a private securities lawyer.
Pitt struck back at those critics and defended his agency’s enforcement staff and their ability to hold corporate America accountable for its misdeeds.
“I will not stoop to the level of those who seek to attack the diligent agency for political revenge,” he said at a news conference before a scheduled appearance in New York Wednesday evening.
“The system needs repair. We are repairing it. I have no interest in blaming anyone for the system I have inherited,” he said.