The US Securities and Exchange Commission (SEC) announced on 9 January 2013 that Enforcement Director Robert Khuzami will leave the agency after nearly four years of leadership, a tenure marked by both praise and criticism. Mr. Khuzami is the latest in a series of post-election SEC resignations which include Chairman Mary Schapiro, General Counsel Mark Cahn and the Director of the Division of Corporation Finance Meredith Cross.

Mr. Khuzami was appointed by Mary Shapiro in 2009 to shake-up the SEC after its image was tarnished for failing to identify Bernard L. Madoff’s Ponzi scheme. At the time, his appointment was overshadowed by perceived conflicts of interest. From 2004 to 2009, during the Global Financial Crisis, Mr. Khuzami was General Counsel for the Americas at Deutsche Bank, one of two banks identified in the 2011 US Permanent Subcommittee on Investigations  Report titled ‘Wall Street and the Financial Crisis:  Anatomy of a Financial Collapse’ as case studies on investment banking abuses that led to the financial crisis of 2008. 

However, with 11 years experience as a federal prosecutor with the United States Attorney’s Office for the Southern District of New York, including three years as Chief of that Office's Securities and Commodities Fraud Task Force, Mr. Khuzami immediately prioritized the Division’s pursuit of financial crisis misconduct. High-profile defendants including Goldman Sachs, J.P. Morgan, Credit Suisse, Citigroup, State Street, Wachovia, Charles Schwab, and former top executives at Fannie Mae, Freddie Mac, and Countrywide. Although these notable cases did much to strengthen the Divison’s reputation, Mr. Khuzami has been criticized by some for not being tough enough on corporate defenders. These cases were all settled on a ‘neither admit nor deny’ basis, a policy position that Mr. Khuzami has vehemently defended in a recent NY Times blog and publicly battled with prominent NY judge Jed Rakoff most notably in his rejection of the SEC’s proposed $285 million settlement with Citigroup Global Markets.

Mr. Khuzami departs leaving a stronger Division after he initiated the “most significant restructuring in the agency's history.” Specialized prosecution units were created nationwide to concentrate on: investment advisers and private funds; large-scale trading and market abuse; mortgage and other structured products; bribery of foreign officials under the Foreign Corrupt Practices Act; and municipal securities and public pensions. He didn’t specify a reason for his departure, saying only “the time has come” for him to leave the Division and that he planned to leave in about two weeks.