Robert Khuzami, head of the U.S. Securities and Exchange Commission’s Enforcement Division, is leaving after a nearly four-year tenure that included a massive restructuring and a record number of new cases. Khuzami, who has not announced his future plans, joined the SEC when the agency was at a low point, reeling from its failure to detect Bernard Madoff’s Ponzi scheme. He moved swiftly to transform the 1,100-member division, overseeing a top-to-bottom overhaul of how the agency detects and prosecutes wrongdoing in the financial marketplace. But he also faced criticism for failing to go after more top Wall Street executives in connection with the financial meltdown and for settling some cases on the cheap and without an admission of wrongdoing.
Khuzami, who was general counsel for the Americas for Deutsche Bank and before that, chief of the securities and commodities fraud task force in the U.S. Attorney’s Office for the Southern District of New York, was recruited in 2009 by former SEC Chairwoman Mary Schapiro to serve as the SEC’s top enforcement lawyer. He left his mark, formulating the first-ever standards for offering deals to individuals in return for cooperation and moving 10 percent to 20 percent of division staff into five new specialized units dedicated to specific areas of securities law. He also gave senior agency officials independent authority to open formal investigations and issue subpoenas, and established an Office of Market Intelligence to handle the 700,000 tips and complaints the SEC receives annually. At the same time, SEC lawyers brought a record number of new cases735 actions in FY 2011 and another 734 actions in FY 2012. High-profile defendants in alleged wrongdoing during the financial crisis include Goldman Sachs, J.P. Morgan, Credit Suisse, Citigroup, State Street, Wachovia, Charles Schwab, and former top executives at Fannie Mae, Freddie Mac, and Countrywide, resulting in $2.68 billion in financial relief for harmed investors.
