SEC removes Republican watchdog after progressive lobbying effort

The Securities and Exchange Commission (SEC) said Friday that it has fired William Duhnke as chair of the Public Company Accounting Oversight Board (PCAOB), handing a victory to progressives who had called for his ouster. 

The agency said in a statement that Duhnke, a former aide to Sen. Richard Shelby (R-Ala.), will be replaced on an acting basis by Duane DesParte effective immediately. No breakdown of the votes from the three Democratic commissioners and two Republican commissioners was available on the SEC’s website.

The SEC also said it would seek people to fill all five spots on the PCAOB.

“I look forward to working with my fellow commissioners, Acting Chair DesParte, and the staff of the PCAOB to set it on a path to better protect investors by ensuring that public company audits are informative, accurate, and independent,” said SEC Chair Gary Gensler. 

DesParte said he is “honored to work with the SEC and the staff of the PCAOB as Acting Chair to ensure that we meet the mission established by Congress.”

The announcement of Duhnke’s dismissal comes days after Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.) pressed Gensler to replace the entire PCAOB.

The two senators, among the most vocal progressives in the upper chamber, said the body was not taking strong enough action to clamp down on corporate misconduct.

The PCAOB was formed after Enron and WorldCom were rocked by accounting scandals.

“We ask that you make full use of these authorities to undo the Trump administration’s damage and begin the serious work of rebuilding the PCAOB. This must start with a clean slate and a new direction in leadership,” the two senators wrote in a letter to Gensler. 

“You have an opportunity and an obligation to strengthen the PCAOB, protect its independence, and ensure it lives up to its responsibilities — all of which are central to the SEC’s mandate to ‘promote a market environment that is worthy of the public’s trust,’ ” they wrote. “Aligning the PCAOB Board with the agency’s mission requires immediate attention, and we ask that you move quickly to address this important matter.”