03/18/2010 05:12 am ET | Updated May 25, 2011

Robert Khuzami: SEC Prosecutor Is Wall Street's Latest Enforcer

Wall Street's wrongdoers may have officially met their match. After less than six months on the job, Robert Khuzami, the newly appointed top prosecutor at the Securities Exchange Commission, has been very busy. Last week, the head of the SEC's new enforcement division brought civil charges against billionaire Raj Rajaratnam, in what's considered to be the largest insider trading case ever.

During his short tenure, Khuzami has also brought fraud charges against former Countrywide CEO Angelo Mozilo and insider trading charges against Dallas Mavericks owner Mark Cuban. (The charges against Cuban were thrown out, and the SEC is currently appealing.)

Khuzami, who was chosen by SEC chair Mary Schapiro, has taken an approach that has "shaken the agency to the core with reforms designed to make sure it does not miss the next Madoff," according to Reuters.

Here's more from Reuters:

To some, the former federal prosecutor has revolutionized SEC enforcement by scrapping middle managers, giving lawyers more subpoena power, and creating squads to focus on areas such as complex financial products and municipal securities.

"Aggressive is an understatement," said Cam Funkhouser, senior vice president of market regulation at the Financial Industry Regulatory Authority, who has known Khuzami for a decade.

The SEC, since Khuzami arrived, appears to be undergoing somewhat of a structural shift. Last week, they hired 29-year-old former Goldman Sachs exec Adam Storch, to be the COO of its enforcement division. New departments within the agency's enforcement division also target things like derivatives and hedge funds.

More from AmLawDaily:

The enforcement division also plans to form five new specialized units, Khuzami said, focusing on asset management (such as hedge and mutual funds); structured financial products (such as derivatives); municipal bonds and public pensions; market abuse and manipulation; and foreign corrupt practices.

The changes will result in more SEC enforcers on the front lines, as the specialized units will be dispersed throughout the country and have the power to assign cases and negotiate settlements. Khuzami hopes the changes will help strip away the layers of bureaucracy that slow down investigations.

Interestingly, Khuzami never intended to become a lawyer. According to Reuters, Khuzami is the son of two professional ballroom dancers. His brother is a musician and his sister is a muralist. "I never had any talent," Khuzami joked to Reuters. "I toyed with going to culinary school."

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