SEC Roundup: Lawmakers Question Structural Reform Costs, Enforcement Director Khuzami to Step Down, & New Commission Chairman Names General Counsel is Named

Lawmakers Question the SEC About Costs Related to Structural Reform
Per the Dodd-Frank Wall Street Reform and Consumer Protection Act’s Section 967, the Securities and Exchange Commission has been tasked with assessing how to restructure its operations to better its use of internal communications and resources. The restructuring plan is being referred to as the Mission Advancement Program. However, lawmakers are concerned that this effort may be too expensive—especially because of the costs associated with retaining independent consultant Booz Allen Hamilton Inc. to help with the restructuring.

Earlier this month, House Oversight Committee Chairman Darrell Issa (R-Calif.) asked the SEC for information about how much the Commission expects to save through the Booz Allen-recommended reforms, its 2012 fiscal year budget for Office of the Chief Operating Officer, CEO Jeffery Heslop’s yearly compensation, the May 2011 contract between the agency and Booz Allen, and the payments that have been made to the latter.

SEC Enforcement Division Director Robert Khuzami to Step Down
After nearly four years, SEC Division of Enforcement Director Robert Khuzami is going to be leaving his post. During his time with the agency, the former prosecutor reorganized the division into five units with subpoena powers.

Also, while under Khuzami, the enforcement division has brought a record number of securities cases, experienced its “most productive” insider trading enforcement period, including its handling of the Galleon Management/Raj Rajaratnam probe that led to charges against 29 defendants, set up its Office of the Whistleblower, and established a cooperation program allowing for non-prosecution agreements, cooperation agreements, and deferred prosecution agreements as incentives for companies and individuals willing to fully cooperate with Commission investigations and enforcement actions.

SEC Chairman Elisse Walters Appoints New General Counsel
Newly appointed SEC Chairman Elisse Walter has named Geoffrey F. Aronow to the post of agency general counsel. He succeeds Mark Cahn, who vacated the position at the end of last year.

It will be Aronow’s job to lead the he Office of the General Counsel in providing advice to the SEC on enforcement actions, federal court proceedings, and rulemakings. He previously served as the Commodities Futures Trading Commission head from 1995 to 1999. While at the CFTC, he oversaw investigations, recommended actions, litigated in court and on administrative proceedings, and worked with international, state, federal, and local regulatory authorities and law enforcement.

Our securities fraud lawyers represent clients with investment fraud claims against financial firms, brokerage firms, investment advisers, brokers, financial representatives, and others. Having your own legal representation can allow you to maximize how much you recover.

Enforcement Director Robert Khuzami to Leave SEC, SEC, January 9, 2013

Securities and Exchange Commission Lawmaker Demands Answers From SEC On Costs Concerns Over Structural Reform, BNA/Bloomberg, January 8, 2013

SEC Names Geoffrey Aronow as General Counsel, SEC, January 7, 2013

More Blog Posts:
Clearing House Association Wants Greater Protections for Clearing Members, Institutional Investor Securities Blog, December 31, 2012

GAO Says Most Financial Regulators Don’t Have the Procedures/Policies to Coordinate Dodd-Frank Rules, Institutional Investor Securities Blog, December 24, 2012

Morgan Stanley Must Pay Ex-Manager $1M, Stockbroker Fraud Blog, January 3, 2013