SEC chairman Arthur Levitt did not indicate his future plans.

"In the last few days, I've notified the White House as well as the incoming Administration that I intend to step down as SEC chairman early next year," Levitt told the Commission staff Wednesday. "While I look forward to my return to private life and the beginning of new challenges, this is a day I knew would come but long have dreaded."

Levitt did not indicate his future plans. Levitt, who was appointed by President Clinton in July 1993, is the Commission's 25th chairman. And on Sept. 9, 1999, Levitt became the longest serving chairman of the Commission.

According to the SEC, the Commission consists of five Commissioners, who are appointed by the President of the United States and confirmed by the Senate. Each Commissioner seat has a five-year term. A chairman is then selected from among the Commissioners.

The Commission currently has four sitting Commissioners and once Levitt leaves there will be two vacancies to fill. The Commission would not speculate on when those positions might be filled or who may be named to fill those positions.

In Levitt's heartfelt announcement, he paid thanks to fellow Commissioners, his office staff and his family. And he also stated that he has just one regret.

"We spent the last year trying to secure what all of you so plainly deserve: pay parity. I am disappointed that Congress passed our budget without that provision," said Levitt. "And while I may not be here, you can bet that I will still be calling anybody on the Hill who will take my call to press the case until this injustice is corrected."

If Levitt's plan was to leave the Commission with a bang he certainly succeeded. Until recently, sparks flew throughout the accounting community as Levitt, concerned over conflicts of interest between tax/audit practices and consulting, pushed to modernize the auditor independence rule.

Several heavyweights in the profession, including the American Institute of CPAs and three of the Big Five firms, were quick to lock horns with Levitt, claiming that the rule, if adopted, would decay audit quality, prevent the firms from attracting talent and perhaps force accounting firms to divorce their consulting units.

Despite the criticism, the Commission adopted a watered-down version of the original proposal in November, curbing the amount of consulting work auditors can provide to their audit clients. The rule will essentially be effective Feb. 5, 2001, however, new restrictions won't take hold for about 18 months, according to SEC officials.

Levitt also told the staff on Wednesday, "I will miss greatly your professionalism, your integrity and your friendship. In an odd way, I'll even miss the coffee at the Wall Street Deli."

"I'll miss meeting someone coming up to me with an idea on how we can get more meaningful disclosure; on how we can help investors help themselves to get a better price or better advice; on how we can make our markets fairer, our accounting practices stronger, our financial products more transparent," he added.

And what message does Levitt have for those who have yet to come?

"No political tide, no flaws of ambition will sidetrack the patriots of this agency from a noble duty fashioned and nurtured for 66 years. The stakes are high and the payoff enormous," said Levitt. "If we stand by and for investors, above all else, we protect the vitality of our markets, the richness of our heritage, the weight of our political independence, and the high ideals of our country."

-- By Antoinette Alexander

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