Saturday, April 17, 2010
Is he ready for the big time?
McClatchy looks at the SEC head of Enforcement as he brings his first big time case against Ali Blankfein and His 40 Thieves at Goldmine Sachs.
The enforcement chief at the Securities and Exchange Commission has spent his first year remaking his office, which was chock full of top managers, but light on investigators.It takes some stones to go after a company that can buy everybody, repeat everybody, who can fire you and I wish him well. If he pulls this off the rest should be easy.
When Khuzami arrived last year, he inherited a demoralized agency, widely ridiculed as the most ineffectual of federal regulators. Faced with salary restrictions, the agency had promoted top-level people to administrative positions at a pace that left the agency top heavy and without enough cops on the beat.
Khuzami set out to change that, leaving top salaries in place but forcing those administrators out of desk jobs and back into investigations.
His office has prosecuted private equity firms for alleged pay-to-play activity in the state of New York, and late last year brought a high-profile insider trading case against Galleon Management, a large hedge fund that invests on behalf of the ultra wealthy.
But that pales next to what is ahead for the SEC in taking on Wall Street's most influential and politically connected player.
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