SEC Announces Khuzami’s Departure as Enforcement Head
By Jeffrey Benzing | January 9, 2013 2:48 pm

The Securities and Exchange Commission has officially announced the departure of Enforcement Director Robert Khuzami, following reports in December that he would step down after nearly four years.

The commission touts record enforcement numbers during Khuzami’s tenure, which included high profile actions against financial firms and executives in the wake of the global financial crisis and saw wide restructuring of the Enforcement Division into specialized units.

The SEC has not yet announced a successor, though Khuzami has reportedly advocated for George S. Canellos, named deputy director of the division in April. A commission spokesperson did not immediately respond to a request for additional information.

Robert Khuzami is stepping down as Enforcement Director at the SEC.

Since Khuzami was named enforcement director in February 2009, the commission has charged more than 150 individuals and entities in relation to the financial crisis and secured $2.68 billion in financial relief for investors, the SEC said. Defendants have included household names like Goldman Sachs, J.P. Morgan, Charles Schwab and former top executives at Fannie Mae, Freddie Mac and Countrywide.

In an effort to address enforcement priorities better, the Enforcement Division was restructured into five special prosecution teams, including a dedicated Foreign Corrupt Practices Act unit, which enforces the anti-bribery law in cooperation with the Justice Department. The SEC calls this the division’s most significant restructuring in agency history.

“Under his direction, the division not only produced record results,” SEC Chairman Elisse B. Walter said in a statement, “but embraced changes that in the years to come will enable the talented staff to better protect investors through increased efficiency, expertise, and strategic focus.”

The division filed a record 735 enforcement actions in its 2011 fiscal year, which gives an indication of Khuzami’s leadership in the wake of the financial crisis, though some have criticized the stats as being overstated. In the 2012 fiscal year, the commission added another 734 actions against companies and individuals.

Khuzami also led the division through what the SEC calls its most productive period of insider trading enforcement, including 180 enforcement actions since the beginning of its 2010 fiscal year in relation to $900 million in illicit profits.

Khuzami is a former federal prosecutor from the Southern District of New York, and under his leadership, the Commission also began using non-prosecution agreements and deferred prosecution agreements which are common in Justice Department settlements.

The agency also opened the Office of the Whistleblower which authorizes rewards for informed tipsters if information reported internally or to the commission leads to enforcement actions.

In his 11 years as a federal prosecutor, Khuzami also served three years as chief of the Securities and Commodities Fraud Task Force in the U.S. Attorney’s Office in the Southern District of New York.

As a prosecutor, Khuzami helped prosecute the “Blind Sheik” Omar Abdel-Rahman in connection with the 1993 World Trade Center bombing and a plot a year later to blow up bridges, tunnels and landmarks in New York City.

“I have spent half my career in public service,” Khuzami said in a statement, “and nowhere is there the level of professionalism, skill, and talent on such a large and coordinated scale as there is in the SEC’s Division of Enforcement.”

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