Tuesday, February 26, 2019

Robert S. Khuzami - Financial crisis-related cases

Robert Khuzami

Robert S. Khuzami (born August 2, 1956) is the current Deputy U.S. Attorney for the United States Attorney's Office for the Southern District of New York.[1] He previously was a United States federal prosecutor and Assistant United States Attorney for the office, and a former director of the Division of Enforcement of the U.S. Securities and Exchange Commission.[2] He was previously a partner at law firm Kirkland & Ellis.[3] and general counsel of Deutsche Bank AG.

Financial crisis-related cases[edit]

As of November 2012, the Enforcement Division during Khuzami's tenure has charged 129 entities and individuals involving wrongdoing generally associated with the financial crisis, including: (a) concealing from investors risks, terms and improper pricing of collateral debt obligations, residential mortgage-backed securities, asset-backed commercial paper and other complex structured products; (b) misleading risk and accounting disclosures to shareholders of public companies in mortgage and mortgage-related businesses; and (c) concealing the extent of risky mortgage-related and other high-risk investments in mutual funds and other financial products. In these cases, 57 CEOs, CFOs and other senior corporate officers have been charged and more than $2.6 billion of monetary relief has been ordered or agreed to, most of which has been or is in the process of being returned to harmed investors.[39]
Khuzami served as co-chair of the Securities and Commodities Fraud Working Group of President Obama's federal-state Financial Fraud Enforcement Task Force (FFETF), created in 2009 to prosecute securities and other fraud arising out of the financial crisis.[40] He was also selected to serve as one of five co-chairs of an additional working group – the Residential Mortgage-Backed Securities (RMBS) Working Group – formed in January 2012 under the FFETF to focus specifically on fraud in the creation, issuance and sale of residential mortgage-backed securities.[41] Other co-chairs of the RMBS Working Group include New York Attorney General Eric Schneiderman. Since formation of the RMBS Working Group, the SEC has filed cases against two major investment firms ordered to pay a combined total of almost $420 million for misleading investors in connection with hundreds of residential mortgage backed securities.[42]

Insider trading cases[edit]

From October 2009 through November 2012, the Enforcement Division filed 168 total insider trading actions, the most in SEC history for any three-year period.[33] In these actions, the SEC has charged 410 individuals and entities for illegal trading totaling nearly $900 million in illicit profit. These cases include those involving Galleon, expert networks, Raj Rajaratnam and Rajat Gupta. (See the SEC's list of major enforcement actions.) In addition, Khuzami embraced the use of sophisticated data analysis to identify patterns of suspicious trading and other misconduct from among the voluminous amount of tips and complaints that the SEC receives each year.[43]

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