Linda Chatman Thomsen, who took heat for the Securities and Exchange Commission’s failure to detect Bernard L. Madoff’s ongoing fraud, is returning to private practice with her former law firm.
According to The Wall Street Journal, Thomsen, who left the SEC in February, will switch from prosecution to defense, joining Davis Polk & Wardwell’s white-collar crime division.
Thomsen came to the SEC in 1995 and was made head of the agency’s enforcement division in 2005.
Linda Chatman Thomsen
A Harvard Law School graduate and a former assistant U.S. attorney, Thomsen early on established a reputation at the SEC as a tough prosecutor.
In addition to helping make the complicated case against Enron, the energy-trader, she also oversaw the prosecution of Martha Stewart.
She oversaw the SEC’s case that gained an award of $50 million for investors in Tyco International LTD, the company once led by L. Dennis Kozlowski.
And the SEC took action against JPMorgan, Bear Stearns and other financial houses while she led the enforcement unit.
But members of Congress faulted Thomsen for the SEC’s failure to heed warnings about Madoff, the investment adviser who pleaded guilty last month to defrauding investors of almost $62 billion.
Harry Markopolos, an investment manager and fraud investigator, had warned the SEC about Madoff as early as 2000.
The agency launched an investigation in 2006, but closed the case two years later without action against Madoff.
Last December, Madoff told his sons of his fraud and they reported him to authorities.
In testimony before a U.S. Senate and committee in January, Thomsen noted that the SEC’s relatively small staff receives “hundreds of thousands of tips a year” and that it investigates those tips it finds promising.
“Everyone at the SEC wishes the alleged Madoff fraud had been discovered sooner,” Thomsen testified. “We are committed to finding ways to make fraud less likely and fraud detection more likely.”
The senators on the committee were not all sympathetic to Thomsen’s defense of the agency.
“So Mr. Madoff was smarter than you?” one senator asked, as reported in The New York Times.
Thomsen declined to answer, saying she couldn’t comment on the specifics of the case against Madoff.
According to the Journal, Thomsen will work in the Washington office of Davis Polk, as will another attorney returning to the firm, Raul F. Yanes, former staff secretary to President George W. Bush.
In addition to hiring Thomsen, Davis Polk has brought in other lawyers with SEC connections.
Annette L. Nazareth, a former SEC commissioner, joined the firm last September. Robert L. D. Colby, the former deputy director of the SEC’s division of trading and markets, came aboard in February.
Robert Khuzami, the former Deutsche Bank AG general counsel for the Americas, has filled Thomsen’s post at the SEC.
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1 Comments
#1. Martha Stewert 05.06.2009
So gee, she investigated those bad boys at Enron… How many went to jail? How much money was recovered? How many people who lost their pensions got them back? And wow - she SURELY made the United States a safer place, throwing Martha in prison. I know *I* feel safer knowing that Martha spent her time in the pokey. And now Linda can go back to representing the same companies that she looked the other way from enforcing, and everyone lives happily ever after. Except, of course, all the people Linda failed to protect.
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