Just days after the Securities and Exchange Commission’s new chairman announced moves to shake things up in the agency’s enforcement division, the SEC announced the departure of director Linda Chatman Thomsen.

An SEC press release said Thomsen plans to return to the private sector.

While no offical announcement has been made about her replacement, press reports say Robert Khuzami, a lawyer with Deutsche Bank AG and former federal prosecutor, is expected to be tapped for the post.

Thomsen joined the SEC staff as an Assistant Chief Litigation Counsel in 1995. She served as an assistant director, an associate director, and deputy director of the Division of Enforcement before former Chairman William Donaldson appointed her as Director in 2005. Prior to joining the SEC, she was in private practice at the law firm of Davis Polk & Wardwell and served as an Assistant United States Attorney for the District of Maryland.

The SEC noted that the Commission brought the second- and third-highest number of enforcement actions in agency history during the past two years under her leadership.

Among the enforcement actions led by Thomsen were: The Enron investigation and resulting actions against a number of large financial institutions including Citigroup, JPMorgan Chase, and Merrill Lynch; the historic auction rate securities market settlements that will return more than $50 billion in liquidity to investors; an expansion of the SEC’s enforcement of the Foreign Corrupt Practices Act, including 10 “Oil for Food” cases and the Siemens case, the largest settlement in the Act’s 30-year history; and the agency’s first false rumor case in which the Commission alleged that a trader caused a 17 percent drop in a company’s stock price in 30 minutes by deliberately spreading false information about that company in order to profit from short selling in the company’s stock.

Thomsen is also credited with leading numerous sub-prime and financial fraud cases, including actions against former Bear Stearns employees for fraud in connection with collapsed hedge funds, and a number of enforcement actions against hedge funds, and hundreds of financial fraud cases, including those against AIG, Fannie Mae, Nortel, and Tyco, and dozens of insider-trading cases.

Topics