Arthur Levitt

Arthur Levitt Jr.
Born	(1931-02-03) February 3, 1931 Brooklyn, New York, U.S.
Occupation(s)	Businessman, former government official
Years active	1950s–present
Known for	Chairman of the United States Securities and Exchange Commission (1993–2001)

Arthur Levitt Jr. (born February 3, 1931) served as the twenty-fifth chairman of the United States Securities and Exchange Commission (SEC) from 1993 until 2001, making him the longest-serving individual in that position. Celebrated for his support of individual investors, he nonetheless faced criticism for not pushing more aggressively for stricter accounting regulations. Since May 2001, Levitt has held the role of senior adviser at the Carlyle Group. Additionally, he has acted as a policy consultant for Goldman Sachs and serves on the board of Bloomberg LP, the parent company of Bloomberg News.

Early life and career

Raised in a Jewish household in Brooklyn, Levitt is the son of Arthur Levitt Sr., who was New York State Comptroller for nearly a quarter-century and oversaw what was then the largest pension fund in the United States. Levitt completed his education at Poly Prep Country Day School in 1948, followed by earning a Phi Beta Kappa B.A. from Williams College in 1952. After college, he spent two years serving in the United States Air Force.

Levitt’s early professional path included working as a drama critic for The Berkshire Eagle. He then spent five years with Time-Life before shifting into finance, initially dealing with cattle and ranches marketed as tax shelters. In 1963, he joined brokerage firm Carter, Berlind & Weill, established by Sanford I. Weill. His inclusion led to the firm being renamed Cogan, Berlind, Weill & Levitt, which eventually transformed into Shearson Loeb Rhoades. His extensive Wall Street tenure working with retail investors deepened his commitment to small investor interests. After sixteen years on Wall Street, Levitt became chairman of the American Stock Exchange (AMEX) in 1978. He departed AMEX in 1989 to lead the New York City Economic Development Corporation, a position he held until 1993.

Prior to his SEC appointment, Levitt owned Roll Call, a newspaper focused on Capitol Hill affairs that he acquired in 1986 and sold to The Economist for $15 million in 1993.

Chairman of the SEC

Appointed by President Clinton in July 1993 and reappointed in May 1998, Levitt served as SEC Chairman until February 9, 2001, when Harvey Pitt succeeded him. Reports indicate that Levitt first became aware of his potential appointment through The Wall Street Journal.

During his tenure, the Financial Accounting Standards Board (FASB) proposed a rule requiring companies to expense stock options—a change met with strong opposition from much of the U.S. business sector. A Merrill Lynch analysis suggested this would slash profits for leading high-tech firms by around 60%. Amid Congressional resistance, including a Senate resolution spearheaded by Senator Joe Lieberman urging FASB to abandon the proposal, Levitt recommended that FASB withdraw the rule—a decision he later identified as his most significant error while at the SEC.

In September 1998, Levitt addressed an audience at New York University with a speech titled "The Numbers Game," where he outlined five common techniques used by corporations to manipulate earnings: big bath charges, creative acquisition accounting, cookie-jar reserves, materiality considerations, and revenue recognition methods. He called for enhanced clarity and comparability in financial reporting.

Under Levitt’s direction in 1997, the SEC granted exemptions allowing certain Enron partnerships to avoid stringent regulations imposed by the Investment Company Act. Critics contend this leniency enabled Enron to bypass rules designed to restrict foreign investments and limit debt shifting.

Throughout his chairmanship, Levitt was widely viewed as an advocate for investors and garnered positive media attention for his efforts.

After the SEC

Levitt holds a position on the Board of Directors at RiskMetrics Group.

Following the resignation of CEO Maurice "Hank" Greenberg amid an accounting probe led by New York Attorney General Eliot Spitzer, Levitt was appointed in 2005 as a special advisor to the board of American International Group and its nominating and corporate governance committee.

In 2006, Levitt provided consulting services to Kroll Inc. during an audit that uncovered San Diego’s pension shortfall amounting to $1.43 billion. The findings involved approximately 30 municipal officials, including five members of the city council. Kroll charged $21 million for conducting the audit, while Levitt’s consulting rate was $900 per hour.

Awards and honors

In January 2001, Levitt was honored with the Award for Distinguished Leadership in Global Capital Markets by the Yale School of Management.

The building formerly known as the Arthur Levitt State Office Building in downtown Manhattan bore his name until it was sold to private developers in 2000.

See also

• Securities and Exchange Commission appointees