SEC Said to Consider Khuzami to Lead Enforcement Unit - SEC's Future and its Role in Protecting Investors

SEC Said to Consider Khuzami to Lead Enforcement Unit (Update1)

By Jesse Westbrook and David Scheer

Feb. 6 (Bloomberg) -- U.S. Securities and Exchange Commission Chairman Mary Schapiro is considering Deutsche Bank AG lawyer and former federal prosecutor Robert Khuzami to succeed Linda Thomsen as head of the enforcement division, two people familiar with the matter said.

Khuzami, an 11-year veteran of the U.S. Attorney’s Office in Manhattan and former head of its white-collar crime unit, may meet senior SEC officials as soon as next week, one of the people said, declining to be identified because the personnel talks aren’t public. Thomsen has led the enforcement unit since May 2005 and remains on the job.

Schapiro has pledged to “reinvigorate” the enforcement unit and is moving to replace senior staff as Congress scrutinizes the agency for missing Bernard Madoff’s alleged $50 billion fraud and its oversight of Wall Street firms crippled by the subprime-mortgage crisis. Enforcement is the agency’s largest division.

“A person familiar with the internal operations of a universal bank will be extraordinarily useful, and his background in the New York financial scene will give him additional insight,” said James Cox, a law professor at Duke University in Durham, North Carolina. A “deep background” in criminal enforcement will help bolster perceptions of the agency, he said.

Khuzami, 52, didn’t respond to a telephone message seeking comment. Deutsche Bank spokesman Ted Meyer declined to comment. The bank promoted Khuzami to become its New York-based general counsel for the Americas in 2004, the Frankfurt-based company said in a statement at the time. SEC spokesman John Nester declined to comment.

General Counsel Named

Schapiro today named David Becker, 61, a partner at Cleary Gottlieb Steen & Hamilton in Washington, to become the SEC’s chief legal officer and senior policy adviser.

Khuzami received an undergraduate degree from the University of Rochester and a law degree from Boston University in 1983. He joined the U.S. Attorney’s Office for the Southern District of New York, which covers Manhattan, in 1990, where he helped try terrorism cases and later focused on white-collar crime including securities fraud cases. He left the prosecutor’s office in 2002.

To contact the reporters on this story: Jesse Westbrook in Washington at jwestbrook1@bloomberg.net; David Scheer in New York at dscheer@bloomberg.net.

Last Updated: February 6, 2009 18:26 EST