POSITION: Director of Enforcement at the Securities and Exchange Commission
LOCATION: Washington D.C.
EDUCATION: Boston University School of Law; University of Rochester
The Securities and Exchange Commission is under a bit of pressure, to say the least. After completely ignoring repeated early warnings about Bernie Madoff's Ponzi scheme, and failing to prevent the collapse or near-collapse of many of the country's largest financial services firms last year, the federal regulatory group has got to prove that it's still relevant. Robert Khuzami, the SEC's new Director of Enforcement, is trying to do just that. Khuzami, who was appointed by SEC head Mary Schapiro in February, replaces Linda Thomsen, who resigned not long after she was skewered by Congress in her testimony about the Madoff mess.
Since February, Khuzami has made a number of changes aimed at helping the agency get back on track and restore credibility. He's overhauled the enforcement division, eliminating many of its supervisory positions and increasing the number of staff working on investigations. He's also planning to create specialized teams to target specific types of financial fraud.
Schapiro picked Khuzami as Thomsen's replacement because he's seen as tough and independent, say industry observers. “Khuzami's an outsider, and that's what the SEC needs right now. He's got 11 years of experience from the U.S. Attorney's Office [for the Southern District of New York.] At the very core, he's a hard-hitting prosecutor,” says one securities lawyer. Before taking over second in command at the SEC, Khuzami served as general counsel for Deutsche Bank and before that he was a federal prosecutor.
Khuzami brings more than just his experience. Earlier this year, he hired Lorin Reisner as his deputy director and George Canellos to head the SEC's New York office — both former colleagues from the U.S. Attorney's Office for the Southern District of New York.
“Khuzami is new blood,” says former SEC Enforcement counsel, Jacob Frenkel. ”He's charged with making sure there's a turnaround at the SEC's enforcement division. It's a division that has been accused of missing huge problems. Khuzami is in charge of responding and deciding how to change all that.”