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Former Top SEC Enforcer Accepts $5 Million From Wall Street Firm

The former top law enforcer for the SEC, Robert S. Khuzami, has done what most Wall Street regulators end up doing – taking a lot of money from Wall Street and friends. Khuzami just landed himself a $5 million a year contract, with two years guaranteed, from Kirkland & Ellis, a law firm that makes a sizable portion of its revenues defending Wall Street from the government.

When he left his role as Wall Street’s top federal enforcer, Robert S. Khuzami began a long courtship with a who’s who of the legal world…

Six months later, lawyers briefed on the matter say, Mr. Khuzami has accepted a job that pays more than $5 million a year at Kirkland & Ellis, one of the nation’s biggest corporate law firms. In doing so, he is following the quintessential Washington script: an influential government insider becoming a paid advocate for industries he once policed.

Well at least he didn’t sell out cheaply. And now Wall Street gets to learn any new tricks and procedures the SEC uses.

As a partner at Kirkland, Mr. Khuzami will represent some of the same corporations that the S.E.C. oversees. Critics say this revolving door — common at the S.E.C. — undermines the agency’s independence and links it inextricably to Wall Street…

The revolving door at firms like Kirkland has alarmed some watchdog groups. The Project on Government Oversight, a nonprofit group, released a study this year highlighting a pattern of former S.E.C. officials securing favorable results from the agency. “It can really help a Wall Street bank to show they’re represented by the former top cop on Wall Street,” said Michael Smallberg, an investigator at the group. “It’s not like you see an equal number of S.E.C. lawyers going to represent shareholders and whistle-blowers.”

Whatever happened to a modest pension? Now the goal is to get the top job in enforcement in hopes of a big cash out once you exit.

It is also worth noting Mr. Khuzami’s record in enforcing the law was not particularly stellar – a few cases posing for the cameras but no real impact. Of course, it might not have been a good financial move to go after his future clients.

Photo by Susan NYC under Creative Commons license

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Dan Wright

Dan Wright

Daniel Wright is a longtime blogger and currently writes for Shadowproof. He lives in New Jersey, by choice.