Fundsters, Take Heed: Khuzami Now Carries the SEC's Stick
News summary by MFWire's editors
Robert Khuzami is officially stepping in as director of the enforcement division at the SEC. On Thursday the SEC confirmed Khuzami's appointment (the Wall Street Journal first broke the news last week: see MFWire, 2/9/2009).
"The staff and I will relentlessly pursue and bring to justice those whose misconduct infects our markets, corrodes investor confidence and has caused so much financial suffering," stated Khuzami.
New SEC chairman Mary Schapiro added that Khuzami "is well-suited to lead the SEC's Division of Enforcement as we continue to crack down on those who would betray the trust of investors."
A former federal prosecutor and general counsel at Deutsche Bank in the Americas, Khuzami succeeds Linda Thomsen. The agency previously said that Thomsen will "return to the private sector" (see MFWire, 2/9/2009).
Company Press Release
Washington, D.C., Feb. 19, 2009 – Securities and Exchange Commission Chairman Mary L. Schapiro announced today that former federal prosecutor Robert Khuzami has been named Director of the Division of Enforcement.
Previously, Mr. Khuzami served as a federal prosecutor for 11 years with the United States Attorney’s Office for the Southern District of New York. As Chief of that Office’s Securities and Commodities Fraud Task Force for three years, Mr. Khuzami prosecuted numerous complex securities and white-collar criminal matters, including those involving insider trading, Ponzi schemes, accounting and financial statement fraud, organized crime infiltration of the securities markets, and IPO and investment adviser fraud. Mr. Khuzami most recently served as General Counsel for the Americas at Deutsche Bank AG.
“I’m pleased to have Rob join the SEC in such an important role at this crucial time,” said Chairman Schapiro. “As we work to improve investor confidence in the markets, our enforcement efforts are vital. Throughout his career, Rob has demonstrated an unwavering commitment to prosecuting wrongdoers and protecting citizens. As a former federal prosecutor, Rob is well-suited to lead the SEC’s Division of Enforcement as we continue to crack down on those who would betray the trust of investors.”
Mr. Khuzami said, “As head of the SEC’s Division of Enforcement, the staff and I will relentlessly pursue and bring to justice those whose misconduct infects our markets, corrodes investor confidence and has caused so much financial suffering. I am honored to join Chairman Schapiro, the Commissioners and the dedicated SEC staff in this critical effort.”
Under Mr. Khuzami’s supervision, the Task Force brought numerous noteworthy securities fraud prosecutions. In U.S. v. Lino and related cases, more than 100 defendants were arrested in an undercover sting operation, which constituted the largest simultaneous arrest in a securities fraud case in Department of Justice history. Charges in the cases included racketeering, securities fraud, a scheme to defraud union pension plans, extortion, and the solicitation of murder. The case concerned the publicly traded securities of 19 companies and the private placements of 16 other companies. Those charged included 11 members and associates of all five New York City crime families.
In another case, U.S. v. Bennett, 11 defendants were convicted of running a Ponzi scheme for fraudulently selling more than $1.0 billion worth of equipment leases and related debt instruments to more than 12,000 investors. Defendant Patrick Bennett was sentenced to 30 years in prison.
During his tenure with the Task Force, Mr. Khuzami significantly increased coordination and joint prosecution of securities fraud cases in the New York City area, including among the New York County District Attorney, the U.S. Attorney’s Office for the Eastern District of New York, and the New York State Attorney General, as well as the SEC and FINRA.
Mr. Khuzami also prosecuted the “Blind Sheik” Omar Ahmed Ali Abdel Rahman in what was then the largest terrorism trial in U.S. history. Following a 10-month trial, 10 defendants were convicted of operating an international terrorist organization responsible for, among other things, the 1993 bombing of the World Trade Center, the assassination of Meir Kahane (the founder of the Jewish Defense League), and planning the virtually simultaneous bombing attacks on the FBI’s New York Headquarters, the Lincoln and Holland Tunnels and the United Nations Headquarters. Mr. Khuzami also supervised various aspects of the initial investigations in New York following the terrorist attacks of Sept. 11, 2001.
Mr. Khuzami has been awarded the Attorney General’s Exceptional Service Award (1996), given for “extraordinary courage and voluntary risk of life in performing an act resulting in direct benefits to the Department of Justice or the nation.” He also has been awarded the Federal Law Enforcement Foundation’s Federal Prosecutor Award (1997), and the Henry L. Stimson Award for Outstanding Public Service (2001).
Since 2004, Mr. Khuzami, 52, has been General Counsel for the Americas at Deutsche Bank. In that role, he has supervised more than 100 lawyers supporting the bank’s various businesses in the Americas, and has overseen Americas-based litigation and regulatory enforcement actions. From 2002 to 2004, he served as Global Head of Litigation and Regulatory Investigations for the bank.
Mr. Khuzami served as a law clerk for the Honorable John R. Gibson of the U.S. Court of Appeals for the Eighth Circuit in Kansas City, Mo. He received his J.D. from the Boston University School of Law, and graduated magna cum laude from the University of Rochester, where he was elected to Phi Beta Kappa.
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