By Sarah N. Lynch
WASHINGTON, July 23 Robert Khuzami, the U.S.
Securities and Exchange Commission's former head of enforcement,
has been hired as a partner in Kirkland & Ellis, the law firm
said on Tuesday.
The announcement ended months of speculation in the legal
community over where Khuzami would land. He had been in talks
with law firms since leaving the SEC in January.
Jeffrey C. Hammes, the chairman of Kirkland's Global
Management Executive Committee, described Khuzami as "one of the
most respected and experienced attorneys within global
enforcement," adding that he "brings invaluable public- and
private-sector experience to our growing government, regulatory
and investigations practice."
Khuzami will be based in the law firm's Washington and New
Kirkland & Ellis also said it has hired Kenneth Lench, a
high-ranking SEC enforcement lawyer who helped oversee many of
the cases stemming from the financial crisis. Lench will leave
the SEC at the end of this week.
Khuzami joined the SEC in February 2009, when the regulatory
agency was at one of the lowest points in its history.
The SEC was still reeling from failing to detect Bernard
Madoff's $65 billion Ponzi scheme and catching heat for its lax
oversight leading up to the financial crisis.
On Khuzami's watch, the enforcement division was
With an eye toward improving efficiency, Khuzami eliminated
mid-level managers. He formed five specialized units to sniff
out wrongdoing in areas such as market abuses and insider
trading, municipal securities, bribery, structured products and
With the SEC under fire for failing to detect the red flags
of Madoff's fraud, Khuzami created an Office of Market
Intelligence that uses a more sophisticated system of tips and
complaints to vet early leads on investigations. That office
also teamed up with the Federal Bureau of Investigation by
embedding FBI agents at the SEC to improve information sharing
Under Khuzami's leadership, the SEC brought a record 735
enforcement actions in fiscal 2011 and 734 actions in fiscal
At the same time, Khuzami faced criticism for not bringing
enough actions against high-level Wall Street executives.
Some skeptics questioned whether his previous ties to
Deutsche Bank, where he worked as a top lawyer in its
U.S. unit when it was heavily involved in packaging subprime
loans, were why the SEC never filed charges against the bank.
The fact that Khuzami and Lench are joining the same law
firm will probably come as no surprise to SEC insiders.
For months, there have been rumors that Khuzami hoped to
find other SEC staffers to accompany him to a law firm, and
Lench's name was among them.
Lench will leave the SEC after a 23-year career. He oversaw
the structured products unit, one of the five specialized
enforcement units that Khuzami created.
Among the landmark achievements of Lench's team was the $550
million settlement with Goldman Sachs over allegations
that the bank misled investors about a collateralized debt
obligation known as ABACUS.
Although the bank settled with the SEC, the agency's case
against Goldman Sachs trader Fabrice Tourre continues. The trial
started last week.