SEC Enforcement Chief Leaving
Tuesday, February 10, 2009
The Securities and Exchange Commission announced yesterday the departure of the director of enforcement and prepared to name a former federal prosecutor to replace her.
New SEC Chairman Mary L. Schapiro is close to naming Robert Khuzami, a former assistant U.S. attorney for the Southern District of New York who had concentrated on financial crimes, as the new enforcement director, a person familiar with the matter said.
He would take over from Linda Thomsen, a 14-year veteran of the SEC and the first top official to leave the agency since Schapiro took over last month.
Schapiro is working to reinvigorate the SEC, especially its enforcement division, and last week announced a pair of steps designed to remove bureaucratic hurdles to pursuing investigations and negotiating penalties over financial fraud.
Khuzami is general counsel in the Americas for Deutsche Bank. For 11 years, he was a federal prosecutor and has headed the white-collar crime unit at the U.S. Attorney's Office in Manhattan. In addition, he helped prosecute the case of the "blind sheikh," Omar Abdel-Rahman, in connection with the bombing of the World Trade Center in 1993.
Khuzami is a graduate of the University of Rochester and earned his law degree from Boston University. A Republican, he has testified in favor of the Patriot Act, which gave federal law enforcement expanded powers.
Thomsen, who has headed the enforcement division since 2005, leaves the agency a week after she endured a harsh grilling in Congress over the agency's failures to detect a $50 billion fraud allegedly perpetrated by Bernard L. Madoff. Citing concerns that anything she or other SEC officials said could interfere with the Madoff investigation, Thomsen repeatedly refused to answer lawmakers' questions. During Thomsen's tenure, the SEC pursued $50 billion worth of settlements with major banks over obscure bonds called auction-rate securities, investigated foreign corruption cases and took action against former Bear Stearns hedge fund managers who traded subprime securities. Before leading the division, Thomsen oversaw the SEC's case against corrupt energy company Enron.
"Linda's achievements have been nothing short of extraordinary, even heroic, in an era of unprecedented challenges in our securities markets," Schapiro said in a statement.
Thomsen said working at the commission "has been an extraordinary privilege."
Thomsen addressed a packed auditorium at the SEC yesterday discussing her long tenure and pride in her staff. The SEC's announcement said she would enter private practice, but did not say at which firm.