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TheStreet Open House

Veteran Warrior Arthur Levitt Still an Upender of Wall Street

Stocks in this article: NYX NDAQ

NEW YORK (The Street) -- Arthur Levitt, no fan of blood sports -- although he did work on Wall Street -- packs a powerful jab.

In one of his many rapid-fire tweets, the longest-serving chairman of the Securities and Exchange Commission pounded the inequality of professional boxing which grinds to a pulp good guys -- the heroes in the ring -- while enriching the less than savory outside the arena.

"Boxing should be banned in NY until gov appoints new commission," he fumed in one of his 140-character posts. "Friday fight disgrace with boxer in coma. Dr and ref negligent. This [is] legal murder."

In other tweets, Levitt reserved punches for his old employer, the SEC, which has failed to use industry-standard tracking methods in monitoring employee trades.

"SEC staffers should have [stock] trades reported in direct feeds of brokerage data," he wrote. "Reform [is] overdue." The agency standards should be "at least as rigorous" as those in banking and brokerage firms, he told The Wall Street Journal.

A few days earlier the old warrior -- dapper and lean, but pushing 83 -- unsparingly knocked a deal that would reunite audit giant PricewaterhouseCoopers with lucrative consulting service Booz & Co., a business that had been spun off in the wake of the Enron debacle.

"We're slipping back," he told Bloomberg News. "As the accounting professional becomes more committed to consulting, their audit activities have got to be questioned." 

The former drama critic (The Berkshire Eagle) and newspaper publisher (Roll Call) respects words -- the shorter and clearer the better. (Disclosure: I served briefly as his editor.)

Shortly after taking office in 1993, he told the writers of corporate financial reports to drop all the auditor gobbledygook and revert to "plain English."

"Transparency" was his mantra. He campaigned for more of it in the darkly run muni markets and auditing industry. He brought transparency to the tech-driven Nasdaq, which reduced margins sharply, saving investors billions.

In his famous "Numbers Game" speech in 1998 at New York University he lashed corporations for muddying their earnings numbers, often relying on obscuring word play or accounting gimmicks from big bath charges to cookie-jar reserves.

Levitt always judged his SEC job as less political plum than bully pulpit. During his eight-year tenure, he held more than 40 town meetings to hear from investors -- often bitter at hidden fees and unseen losses -- and to explain why the stocks were still safe and sometimes even wise. An inveterate gadget nut -- he still enjoys putzing around with high-tech devices -- he created the SEC's first Web site (yes, the federal government can do IT) and was an effective campaigner against online securities fraud.

Even today, at an age when most executives contemplate quiet retirement, he relishes the fight.

"More women in boardrooms? Make it the law," he blasts in one tweet.

"Iran negotiations are totally wrong headed," zings another.

"A great deal of work has to be done to bring transparency to municipal markets. Problems relate to actuaries, auditors and politicians."

"[Ratings] agencies don't deserve SEC blessing."

"It's Homeland time! Best TV of the week," he muses, then turns intellectual: "[Historian] Toynbee has it right: 'civilization then sank owing to the sins of nationalism, militarism and the tyranny of a despotic minority."

Against sins from despotic types, it's nice to have a counter puncher.

-- Written by William Inman

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