S.E.C.’s Revolving Door Hurts Its Effectiveness, Report Says
Robert S. Khuzami took a step through Washington’s revolving door on Friday, departing his post as one of Wall Street’s top enforcers en route to the private sector, where he is expected to reap millions.
A new report suggests that Mr. Khuzami, like other Securities and Exchange Commission officials who pass between Washington and Wall Street, will be well worth the pay.
The Project on Government Oversight, or POGO, a nonprofit watchdog group long critical of the revolving door, is set to release a study on Monday highlighting a pattern of S.E.C. alumni going to bat for Wall Street firms — and winning. The report, similarly skeptical of Wall Street lawyers joining the S.E.C., cites recent enforcement cases and scuttled money market regulations to underscore its concerns.
“Former employees of the Securities and Exchange Commission routinely help corporations try to influence S.E.C. rule-making, counter the agency’s investigations of suspected wrongdoing, soften the blow of S.E.C. enforcement actions, block shareholder proposals and win exemptions from federal law,” the report says.