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Announcing Investigation, McHenry Instructs the SEC & PCAOB to Preserve Documents Regarding Move to Politicize an Independent PCAOB


Announcing Investigation, McHenry Instructs the SEC & PCAOB to Preserve Documents Regarding Move to Politicize an Independent PCAOB




Washington,
June 9, 2021 
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The top Republican on the House Financial Services Committee, Patrick McHenry (NC-10), sent letters to Securities and Exchange Commission (SEC) Chair Gary Gensler and Public Companies Accounting Oversight Board (PCAOB) Acting Chair Duane DesParte. These letters follow Chair Gensler’s move last week to blatantly politicize an independent PCAOB by terminating then-PCAOB Chair William Duhnke III and announcing his intent to fill all five Board seats with handpicked appointees.


Republican Leader McHenry instructs Chair Gensler and Acting Chair DesParte to preserve all documents and information regarding last week’s events and formally release the report on PCAOB’s governance practices prepared by former SEC Chair Harvey Pitt.


Read Republican Leader McHenry’s letter to SEC Chair Gensler here and Acting PCAOB Chair DesParte here.

 

Republican Leader McHenry writes: “In a closed meeting on Thursday, June 3, 2021, a majority of the SEC’s five commissioners voted on partisan lines to remove William Duhnke III from the Public Company Accounting Oversight Board (PCAOB). Late the next day—Friday, June 4—the SEC issued a press release to announce the move against Chairman Duhnke, whose term was set to expire in October 2022. The press release also stated the SEC will remove and replace the Board’s full membership, even as the three remaining members are in the midst of five-year terms. I am writing to instruct the Commission to preserve all documents and information that may shed light on this unprecedented attempt to politicize the PCAOB.


“The brazen attempt by the SEC’s Democratic majority to radically alter the PCAOB raises serious questions about whether and why the Biden Administration is eroding the Board’s independence and deliberately exposing it to the ‘vicissitudes of politics.’ A recent report by former SEC Chair Harvey Pitt on PCAOB governance issues may provide some answers. The SEC hired Pitt in July 2019 to assess the PCAOB’s corporate governance policies and practices and recommend changes as appropriate. Pitt’s ensuing report, which cost taxpayers $125,000, may shed light on whether reforms to the PCAOB are necessary and clarify whether the SEC has any legitimate basis for overhauling the Board’s membership, aside from the Democratic majority’s apparent partisan motives. I expect the SEC to assist the Committee’s investigation and formally authorize the report for release.”


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