Khuzami Testimony: "Mortgage Fraud, Securities Fraud and the Financial Meltdown: Prosecuting Those Responsible."

Posted on December 28, 2009 by Regina Ori

On December 9, 2009, the Director of the SEC’s Division of Enforcement, Robert Khuzami, testified before Senate Judiciary Committee at a hearing entitled “Mortgage Fraud, Securities Fraud and the Financial Meltdown: Prosecuting Those Responsible.” Khuzami’s testimony detailed five primary areas in which the SEC is focusing its enforcement efforts.

First, the SEC is investigating and pursuing enforcement cases based on unlawful conduct related to the financial crisis.  Second, the SEC is enhancing its working relationship with other law enforcement authorities, including the DOJ.  Third, the SEC is implementing several reorganization initiatives, including the creation of specialized units within the Division of Enforcement that are aimed at attacking both the causes of the recent financial crisis, as well as current and future market practices that are a potential cause for concern for the SEC.  Fourth, the SEC’s staff is proposing various legislative reforms, including nationwide service of process, a whistleblower program and enhanced access to grand jury material.  Last, the SEC is seeking additional resources for both the Enforcement Division and throughout the SEC.

A transcript of Khuzami’s testimony is available here.

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Chairwoman Schapiro Highlights SEC Enforcement Initiatives in First TV Interview

Posted on April 21, 2009 by Regina Ori

On April 16th, SEC Chairwoman Mary Schapiro appeared on PBS’s Nightly Business Report for her first television interview since taking office. During her interview, Chairwoman Schapiro discussed initiatives for the SEC’s “aggressive enforcement program,” including new regulations for credit rating agencies, possibly as soon as this summer. According to Chairwoman Schapiro, these rules will be designed to “align interests of credit rating agencies with the users of the ratings (investors) – as opposed to the issuers of the securities.”

Chairwoman Schapiro also indicated that within the next month, the Commission will be considering rules to enable “responsible proxy access” for “longer term shareholders,” in order to increase Board-member accountability.

Other topics addressed during the interview include increased enforcement actions against ponzi schemes, the Commission’s utilization of investor fraud tips, and the SEC’s role in boosting investor confidence.

Click here to view the extended version of Chairwoman Schapiro’s interview.

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