Robert Khuzami’s experience as a prosecutor of terrorists and white-collar criminals would seem to trump his political preferences.
A lawyer and a backer of George W. Bush in 2004 and presidential candidate John McCain in 2008, Khuzami was named last week to head the enforcement division of the Securities and Exchange Commission. He succeeds Linda Thomsen.
He comes to the post from a job on Wall Street, having served as Deutsche Bank AG’s general counsel for the Americas. But previous to that, he was involved in a number of high-profile cases as a federal prosecutor.
The SEC has faced strong criticism for its failure to detect trading irregularities in the case of Bernard L. Madoff, an investment adviser charged in what may be a $50 billion Ponzi scheme.
Mary L. Schapiro, the chairwoman of the commission and a Barack Obama appointee, has pledged to restore confidence in the commission.
Her appointment of Khuzami is seen as part of an effort to step up the agency’s enforcement of trading regulations.
Khuzami, 52, made his reputation as a tough prosecutor during his 11 years as an assistant U.S. attorney in the office of the U.S. Attorney for the Southern District of New York office.
Given its location, the office has a steady supply of demanding and newsworthy cases, and success there is a kind of passport to success in a legal career.
“It travels with you,” said Roger L. Stavis, a defense lawyer in a case prosecuted by Khuzami in the 1990s, told Bloomberg News. “You can work on Wall Street, but you are not of Wall Street.”
As The New York Times reported in a recent story, the list of other Southern District alumni includes former New York City Mayor Rudolph W. Giuliani as well as Patrick Fitzgerald, the man who prosecuted I. Lewis “Scooter” Libby and is now taking on former Illinois Gov. Rod Blagojevich.
In 1995, Khuzami, Fitzgerald and Andrew McCarthy successfully prosecuted Omar Abdel Rahman, the so-called Blind Sheik, for his efforts to blow up New York City landmarks.
Khuzami went on to lead the SEC’s securities and commodities task force for three years. In 1999, he directed the successful prosecution of Syracuse businessman Patrick R. Bennett for a Ponzi scheme involving $1 billion in equipment leases to 12,000 investors.
Khuzami went to Deutsche Bank AG in 2002 and served as global head of litigation and regulatory investigations before becoming general counsel for the Americas.
In 2004, he gave a brief speech at the Republican National Convention calling for the extension of the Patriot Act and supporting the re-election of President Bush.
According to federal campaign records, Khuzami contributed $2,300 to the McCain campaign in 2007.
Arthur Levitt Jr., a former SEC chairman, told the Times that Schapiro’s appointment of a Republican to be the agency’s “top cop” was an act of independence.
“The commission, since it was formed, was always known as nonpartisan and free of interference from the White House,” Levitt said. “In recent years that changed. They had ideologues. What Mary did in appointing a Republican who spoke for George Bush was an act of political courage that the commission hasn’t seen in many years.”
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