SEC Top Cop Talks Tough

SEC Top Cop Talks Tough - 5/7/2009

Home

Index of Filings

News and Press Releases

Filings

Decisions

Settlements

Litigation Activity Indices

Top Ten List

Annual/Quarterly Updates

Clearinghouse Research

Articles & Papers

Search

Related Sites

About Us

Local Rules

Sponsors

Register

_______________
Copyright © 2001
Stanford Law School

2009 News and Press Releases

SEARCH

News	News 2009
HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

HEADLINE NEWS:

SEC Top Cop Talks Tough, In Testimony Before A Senate Banking Subcommittee, The Sec's New Enforcement Director Suggests A Return To The Immediate Post-Enron Era Of Big Corporate Penalties.
Tim Reason

CFO.com. May 7, 2009
_________________________________________________________________________

EXCERPT: One day after a government report leveled serious criticism at the Securities and Exchange Commission's policing of financial markets under past-Chairman Christopher Cox, the agency's new top cop promised a reinvigorated enforcement division. Robert Khuzami, who was appointed director of enforcement in February, insisted in prepared testimony that "reinvigorating the SEC's Enforcement program is a top priority." In his testimony, Khuzami noted that "I fully concur" with the recommendations of a Government Accountability Office report, issued publicly for the first time yesterday. That report suggested that policies put in place under Cox had discouraged Enforcement Division attorneys from pursuing financial penalties against corporations in cases of financial fraud. The report also said that it was difficult for SEC investigators to obtain subpoena authority, which frequently forced them to rely on representations made by the corporations under investigation. Khuzami, who joined the SEC after five years as general counsel for Deutsche Bank, also spent 11 years at the U.S. Attorney's Office for the Southern District of New York, including three years as chief of the Securities and Commodities Fraud Task Force. Khuzami noted that the staff of the enforcement division numbers 1,100, but oversees "more than 30,000 registrants, including more than 12,000 public companies, 4,600 mutual fund families, 11,000 investment advisers, 600 transfer agents, and 5,500 broker dealers." As a result, he said, he plans to "focus on cases involving the greatest and most immediate harm and on cases that send an outsized message of deterrence." That comment strongly suggests a return to the SEC enforcement activities of the 2002-2004 time period. During that period, which followed the failures of Enron and Worldcom, total corporate penalties soared from $44 million in 2001 to more than $1 billion in both 2003 and 2004.

Back to News page | Back to Archived News 2009 page | Back to Top

�