Robert Khuzami, director of the SEC’s enforcement division, told a Senate subcommittee Wednesday that his division had a record 735 actions that gained a total of $2.8 billion in penalties and repayments in fiscal 2011, which ended Sept. 30.
Mr. Khuzami testified before the Senate Banking, Housing and Urban Affairs subcommittee that his division completed its most significant reform since 1972. It added specialized investigative units for asset management, market abuse, new products, municipal securities and public pensions, and foreign corrupt practice.
He was among six department heads who testified on the challenges of new duties triggered by the Dodd-Frank Wall Street Reform and Consumer Protection Act and on the difficulties in finding staff with expertise in increasingly sophisticated financial markets and products.
Also appearing before the subcommittee were directors Eileen Rominger of the investment management division; Meredith Cross, corporation finance; Robert W. Cook, trading and markets; Craig Lewis, division of risk, strategy and financial innovation; and Carlo V. di Florio, compliance inspections and examination.
Ms. Rominger said her division’s biggest challenges include new registration requirements for hedge funds and private funds, and keeping up with new investment products. Her division “would like to bolster its technical experience in complex areas,” she told the panel.
The SEC progress report was welcomed by business groups who have long pressed for substantive changes in both SEC regulation and enforcement activity.
“It was an accomplishment that all heads were there, but there needs to be more coordination,” Tom Quaadman, vice president of the U.S. Chamber of Commerce Center for Capital Markets, said in a telephone interview.
“You have a wide, diverse marketplace, but we have a regulator that hasn’t been able to keep up,” Mr. Quaadman said. He noted that during passage of the Dodd-Frank legislation, “Congress never reformed the regulators. Now, Congress is clearly paying attention, and we think that the impetus for reform will grow.”