Robert S. Khuzami (; born August 2, 1956) was the Deputy U.S. Attorney for the United States Attorney's Office for the Southern District of New York until March 22, 2019. 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. He was previously a partner at law firm Kirkland & Ellis. and general counsel of Deutsche Bank AG.
Education and early employment Khuzami was born in Brooklyn and grew up in Rochester, New York.Ben Hallman, "Second Acts" The American Lawyer (March 2010) Retrieved January 10, 2011 His parents were professional ballroom dancers of Lebanese descent and had a dancing school."Robert Khuzami intends to make SEC a more nimble, thorough agency" Seattle Times (April 19, 2009) Retrieved January 21, 2011
He attended Rush-Henrietta Senior High School, graduating in 1974. After taking a few years off after high school, Khuzami enrolled in college, first studying at the State University of New York at Geneseo, then transferring to the University of Rochester where he was elected to Phi Beta Kappa and graduated magna cum laude in 1979. He received a Juris Doctor degree in 1983 from Boston University School of Law. From 1983 to 1984, he was a law clerk for John R. Gibson of the U.S. Court of Appeals for the Eighth Circuit in Kansas City, Missouri"Robert Khuzami Named SEC Director of Enforcement" U.S. Securities and Exchange Commission Press Release (February 19, 2009) Retrieved January 9, 2011. and then went to work at Cadwalader, Wickersham & Taft as a litigation associate.
US Attorney's Office, Southern District of New York Assistant United States Attorney Khuzami was a prosecutor in the U.S. Attorney's Office in Manhattan's Southern District of New York from 1991 to 2002. From 1999 to 2002, he was chief of that office's Securities and Commodities Fraud Task Force, where he prosecuted complex securities and white-collar crime, including insider trading, Ponzi schemes, accounting and financial statement fraud, organized crime infiltration of the securities markets, and initial public offering and investment adviser fraud. Among other cases, the Task Force under Khuzami was responsible for "Operation Uptick," a one-year joint DOJ-FBI-SEC-NASD undercover operation in which a "front" investment advisory business was set up and located in premises that were bugged with court-authorized eavesdropping devices. As a result, 120 persons were arrested on a variety of securities fraud charges in a single day, including 10 members of the Bonanno and Colombo organized crime families, a former New York City police detective, 57 securities brokers, 12 stock promoters, 30 corporate officers, directors and other insiders, two accountants, a hedge fund manager, and others. This was the largest number of defendants ever arrested at one time on securities fraud related charges and one of the largest number ever arrested in a criminal case of any kind.Press Release, United States Attorney, Southern District of New York (June 14, 2000) Retrieved May 14, 2012
One of his cases involved Patrick R. Bennett, founder of Bennett Funding Group, who was charged with running a pyramid scheme and cheating 12,000 investors of $600 million.Charley Hannagan, "Lawyer doesn't rest his defense of notorious white-collar criminal Patrick R. Bennett" The Post-Standard, Syracuse, NY (August 30, 2009) Retrieved January 10, 2011 Bennett's first trial, in March 1999, resulted in a hung jury and the judge, Thomas P. Griesa, declared a mistrial. Khuzami announced his intention to continue legal pursuit of Bennett on all counts for which the jury did not reach a decision.Leslie Eaton, "Hung Jury Leads to Mistrial in Fraud Case" The New York Times (March 3, 1999) Retrieved January 10, 2011 A second jury failed to reach a decision on 11 securities and mail fraud charges and a second judge, John S. Martin, Jr., declared a mistrial on the unresolved charges in June 1999."Leasing-Firm Executive Convicted of Stock Fraud" The New York Times (June 11, 1999) Retrieved January 10, 2011 Bennett, who admitted to seven counts of lying to SEC prosecutors but otherwise maintains his innocence, was described by his lawyers as an inept businessman overwhelmed by an expanding company. In a practice then legal, the judge used his discretion to convict Bennett of stock fraud and money laundering. He was not convicted of running a Ponzi scheme, the main charge. Bennett was also ordered to forfeit $109 million, although he filed for bankruptcy in 1996 and was declared indigent and his lawyers were court-appointed. He was sentenced to 22 years, later extended to 30 because his then-wife did not turn over assets to repay investors.
Khuzami was selected by then-U.S. Attorney Mary Jo White to work with Andrew C. McCarthy and Patrick Fitzgerald in the prosecution of the "Blind Sheikh", Omar Abdel-Rahman, a career-changing case. At the time, the largest terrorism trial in U.S. history, ten defendants were convicted of operating an international terrorist organization responsible for the February 1993 World Trade Center bombing and who planned simultaneous bombing attacks on Federal Bureau of Investigation (FBI) New York headquarters, the United Nations and the Lincoln and Holland Tunnels. Khuzami also prosecuted those accused of assassinating Meir Kahane,Larry Neumeister, "Sheik Plotted War, Prosecutor Says" The Seattle Times (January 30, 1995) Retrieved January 10, 2011"Is Robert S. Khuzami Jewish?" Tzvee's Talmudic Blog (April 16, 2010) Retrieved January 9, 2011 and plotting the murders of Hosni Mubarak of EgyptJoseph Fried, "In Plea Deal, Jerseyan to Testify in Terror Trial" The New York Times (May 2, 1995) Retrieved January 10, 2011 and the Secretary General of the United Nations. Khuzami also supervised some of the initial investigation in New York following the September 11, 2001 attacks.
Deutsche Bank - Americas In 2002, Khuzami was hired by Richard H. Walker to work at Deutsche Bank in New York as Global Head of Litigation and Regulatory Investigations, where he oversaw litigation and regulatory investigations. In 2004, he was promoted to serve as General Counsel for the Americas, where he supervised more than 100 lawyers. From 2002 to 2004, he headed their global litigation and regulatory investigations. He stayed at the bank until 2009. Walker, who had met Khuzami at Cadwalader, Wickersham & Taft when Walker was a partner there, later recommended him for the enforcement job at the SEC, a job he had once held himself."Deutsche Bank Hires Former S.E.C. Official" The New York Times (October 2, 2001) Retrieved March 3, 2011
SEC Division of Enforcement In 2009 Khuzami was appointed by U.S. Securities and Exchange Commission (SEC) Chairman Mary Schapiro to succeed Linda Chatman Thomsen after the SEC had come under public criticism for failing to detect Bernard Madoff's Ponzi scheme."Khuzami Will Lead SEC Enforcement" The Wall Street Journal (February 20, 2009) Retrieved January 9, 2011David Lieberman and Matt Krantz, "Goldman Sachs admits it misled investors, pays $550M fine" USA Today (July 15, 2010) Retrieved January 9, 2011 His appointment was controversial because of his employment at Deutsche Bank, a global investment firm which did business with Goldman Sachs. He was portrayed as an outsider by some but had 11 years' experience as a federal prosecutor.Kevin G. Hall, "Reputation of SEC's Khuzami is on the line vs. Goldman" McClatchy Newspapers (April 16, 2010) Retrieved January 9, 2011
Inheriting a demoralized agency ridiculed as ineffective, Khuzami began a broad reorganization of the top-heavy Enforcement Division."Power 30: The World's Most Influential Players" The Wall Street Journal/SmartMoney (October 26, 2010) Retrieved January 10, 2011 He left top salaries in place, but forced administrators back into investigations. He eliminated a layer of management.Jenna Greene, "Champions and Visionaries" The National Law Journal (June 7, 2010) Retrieved January 10, 2011Charlie Gasparino, "Khuzami Turning Up the Heat at the SEC" FOXBusiness (October 28, 2010) Retrieved January 9, 2011 and formed national units to concentrate expertise in five areas. He created a new system to collect, organize, investigate and data mine tips and complaints, tens of thousands of which are received by the SEC every year. The new units focus on probes into investment advisers, investment companies, hedge funds and private equity funds; financial derivatives and other "complex financial products;" market abuses, such as large-scale insider trading and market manipulations; municipal securities and public pension funds; and violations of the Foreign Corrupt Practices Act. Khuzami obtained Commission approval to delegate to senior staff the authority to issue subpoenas without preapproval, and created the first-ever Office of the chief operating officer (COO) for the Division to handle IT, project management, budget, HR and similar issues that previously had been handled by lawyers.Jenna Greene, "New Enforcement Chief Aims to Restore Confidence in SEC; Khuzami looks to scrub tarnish from agency" The National Law Journal (October 19, 2009) Retrieved June 12, 2012Jenny Anderson and Zachery Kouwe, "S.E.C. Enforcers Focus on Avoiding Madoff Repeat" The New York Times (February 8, 2010) Retrieved June 12, 2012Suzanne Barlyn, "SEC Aims to Streamline Complaint Process" The Wall Street Journal (October 25, 2010) Retrieved June 12, 2012 Khuzami also hired industry experts, non-lawyers with genuine market expertise such as portfolio managers, traders, operations personnel, structurers, and risk managers who "know where the rocks are and what is buried beneath them.""SEC Announces Initiative to Encourage Individuals and Companies to Cooperate and Assist in Investigations" SEC Release No. 2010-6 (January 13, 2010) Retrieved June 12, 2012Robert S. Khuzami, Remarks at News Conference Announcing Enforcement Cooperation Initiative and New Senior Leaders Speech by SEC Staff (January 13, 2010) Retrieved June 12, 2012Robert Khuzami, Remarks Before the Consumer Federation of America's Financial Services Conference Speech by SEC Staff (December 1, 2011) Retrieved June 12, 2012 Khuzami adopted these changes to make the Division smarter and quicker, noting "whether you are dealing with terrorism or securities fraud, it is better to be in the prevention business than the cleanup business. We want to be able to detect wrongdoing earlier in the cycle and minimize harm to investors." Khuzami also established a new Cross Border Working Group, a proactive, risk-based initiative focusing on U.S. companies whose substantial foreign operations might have accounting or auditing problems, and a MicroCap Fraud Working Group to address the long-standing problem of fraud in connection with offering and trading of microcap securities, otherwise known as "penny stocks"."SEC Enforcement Division Produces Record Results in Safeguarding Investors and Markets; Agency's Fiscal Year Totals Show Most Enforcement Actions Filed in Single Year" SEC Release No. 2011-234 (November 9, 2011) Retrieved June 12, 2012 Khuzami's initiatives are the largest restructuring of the Enforcement Division in its 40-year history.