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Arthur Levitt Jr. (born February 3, 1931) is the former Chairman of the
United States Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against mark ...
(SEC). He served from 1993 to 2001 as the twenty-fifth and longest-serving chairman of the commission. Widely hailed as a champion of the individual investor, he has been criticized for not pushing for tougher accounting rules. Since May 2001 he has been employed as a senior adviser at the
Carlyle Group The Carlyle Group is a multinational private equity, alternative asset management and financial services corporation based in the United States with $376 billion of assets under management. It specializes in private equity, real assets, and pri ...
. Levitt previously served as a policy advisor to Goldman Sachs and is a Director of Bloomberg LP, parent of Bloomberg News.


Early life and career

Levitt grew up in a
Jew Jews ( he, יְהוּדִים, , ) or Jewish people are an ethnoreligious group and nation originating from the Israelites Israelite origins and kingdom: "The first act in the long drama of Jewish history is the age of the Israelites""The ...
ish family in Brooklyn. Levitt's father, Arthur Levitt Sr., served as New York State Comptroller for 24 years and was sole trustee of the largest pension fund in America at the time. Levitt attended Brant Lake Camp, a summer camp for boys in the
Adirondacks The Adirondack Mountains (; a-də-RÄN-dak) form a massif in northeastern New York with boundaries that correspond roughly to those of Adirondack Park. They cover about 5,000 square miles (13,000 km2). The mountains form a roughly circular d ...
. He attended and graduated from
Poly Prep Country Day School Poly Prep Country Day School (commonly known as Poly Prep) is an independent, co-educational day school with two campuses in Brooklyn, New York, United States. The Middle School (5th to 8th grades) and Upper School (9th to 12th grades) are locat ...
in Brooklyn in 1948. He graduated
Phi Beta Kappa The Phi Beta Kappa Society () is the oldest academic honor society in the United States, and the most prestigious, due in part to its long history and academic selectivity. Phi Beta Kappa aims to promote and advocate excellence in the liberal ar ...
from Williams College in 1952, before serving for two years in the
Air Force An air force – in the broadest sense – is the national military branch that primarily conducts aerial warfare. More specifically, it is the branch of a nation's armed services that is responsible for aerial warfare as distinct from an ...
. He first worked as a drama critic for '' The Berkshire Eagle'', and after the
Air Force An air force – in the broadest sense – is the national military branch that primarily conducts aerial warfare. More specifically, it is the branch of a nation's armed services that is responsible for aerial warfare as distinct from an ...
, he was with Time-Life for five years before selling cattle and ranches as tax shelters. In 1963, Levitt joined the brokerage firm Carter, Berlind & Weill, founded three years earlier by
Sanford I. Weill Sanford I. "Sandy" Weill (; born March 16, 1933) is an American banker, financier and philanthropist. He is a former chief executive and chairman of Citigroup. He served in those positions from 1998 until October 1, 2003, and April 18, 2006, resp ...
. Levitt's name was eventually added to the firm's when it was renamed
Cogan, Berlind, Weill & Levitt Cogan, Berlind, Weill & Levitt, originally Carter, Berlind, Potoma & Weill, was an American investment banking and brokerage firm founded in 1960 and acquired by American Express in 1981. In its two decades as an independent firm, Cogan, Berlin ...
in the mid-1960s; through a series of mergers the firm eventually evolved into
Shearson Loeb Rhoades Shearson was the name of a series of investment banking and retail brokerage firms from 1902 until 1994, named for Edward ShearsonWall Street, Levitt became the Chairman of the
American Stock Exchange NYSE American, formerly known as the American Stock Exchange (AMEX), and more recently as NYSE MKT, is an American stock exchange situated in New York City. AMEX was previously a mutual organization, owned by its members. Until 1953, it was known ...
(AMEX) in 1978. In 1989, he left the AMEX to serve as Chairman of the
New York City Economic Development Corporation New York City Economic Development Corporation (NYCEDC) is a nonprofit corporation whose stated mission is to "leverage the city’s assets to create beneficial jobs that drive growth. This ensures equitable and sustainable development across al ...
until 1993. Before joining the SEC, Levitt owned '' Roll Call'', a newspaper that covers
Capitol Hill Capitol Hill, in addition to being a metonym for the United States Congress, is the largest historic residential neighborhood in Washington, D.C., stretching easterly in front of the United States Capitol along wide avenues. It is one of the ...
, which he purchased from the paper's founder,
Sid Yudain Sidney Lawrence "Sid" Yudain (May 6, 1923 – October 20, 2013) was an American journalist who founded ''Roll Call'' in 1955 as a community newspaper focused on the United States Congress and Capitol Hill. Yudain published the first issue of ''Roll ...
, in 1986. The newspaper was eventually sold to The Economist for $15 million in 1993.


Chairman of the SEC

Levitt was appointed to his first five-year term as Chairman of the SEC by President Clinton in July 1993 and reappointed in May 1998. He left the Commission on February 9, 2001, and was succeeded by Harvey Pitt. Levitt has said that he first learned of his being considered for the job from The Wall Street Journal. At the time Levitt came to the SEC, the
Financial Accounting Standards Board The Financial Accounting Standards Board (FASB) is a private standard-setting body whose primary purpose is to establish and improve Generally Accepted Accounting Principles (GAAP) within the United States in the public's interest. The Securi ...
(FASB) had proposed requiring companies to record stock options on their income statements, which split the accounting industry and was opposed by many in the American business community. According to a Merrill Lynch study, expensing stock options would have reduced profits among leading high-tech companies by 60% on average. Congress began to exert pressure on the FASB, and on May 3, 1994, the Senate, led by Democratic Senator Joe Lieberman, offered a non-binding resolution urging FASB not to adopt the proposed rule; the vote in favor was 88–9. Concerned that insensitivity to this sentiment in Congress might threaten FASB as an independent standard setter, Levitt urged the FASB to not go ahead with the rule proposal. He later said this "was probably the single biggest mistake I made in my years at the SEC." In September 1998 at New York University, he gave a speech entitled "The Numbers Game". It addressed five ways in which corporations were managing earnings ( big bath charges, creative acquisition accounting, cookie-jar reserves, materiality, revenue recognition). In his speech, Levitt advocated improving the transparency and comparability of financial statements. In 1997, the SEC under Levitt's leadership approved the exemption of some Enron partnerships from the tight accounting controls of the Investment Company Act of 1940. Without this exemption, critics maintain, the company would have been constrained by strict rules found in 1996 legislation that would have prohibited certain foreign investments and the shifting of debt to its foreign subsidiary shell companies. During Levitt's tenure at the SEC, he was widely viewed as a pro-investor advocate and received favorable press coverage.


After the SEC

Levitt serves on the Board of Directors for RiskMetrics Group. In 2005, Levitt was named a special advisor to the
American International Group American International Group, Inc. (AIG) is an American multinational finance and insurance corporation with operations in more than 80 countries and jurisdictions. , AIG companies employed 49,600 people.https://www.aig.com/content/dam/aig/amer ...
's board of directors and the board's nominating and corporate governance committee following the resignation of CEO and Chairman Maurice "Hank" Greenberg, who left after an investigation into the firm's accounting practices by New York Attorney General
Eliot Spitzer Eliot Laurence Spitzer (born June 10, 1959) is an American politician and attorney. A member of the Democratic Party, he was the 54th governor of New York from 2007 until his resignation in 2008. Spitzer was born in New York City, attended Pr ...
. Levitt oversaw an audit published in August 2006, by Kroll Inc. – where he is a consultant – describing how the City of San Diego had allowed a pension deficit of $1.43 billion. The report blamed around 30 city officials, including five incumbent council members. Kroll charged the City of San Diego $21 million for the report, with Levitt's time billed at $900 per hour.


Awards and honors

In January 2001, Levitt received the "Award for Distinguished Leadership in Global Capital Markets" from the Yale School of Management. The Arthur Levitt State Office Building in downtown Manhattan was named for him until it was sold to private developers in 2000.


See also

* Securities and Exchange Commission appointees


Notes


References

* * Levitt's biography as told by him to the editorial staff. *


Further reading

* * {{DEFAULTSORT:Levitt, Arthur 1931 births Living people People from Brooklyn Jewish American government officials Members of the U.S. Securities and Exchange Commission Williams College alumni American financial businesspeople American male journalists American International Group Goldman Sachs people The Carlyle Group people Journalists from New York City Poly Prep alumni Charles H. Revson Foundation Clinton administration personnel George W. Bush administration personnel