Overhyped and underdelivered.

Khuzami Says He Will Step Down as SEC’s Top Enforcement Cop

Bloomberg

resignationRobert Khuzami, the U.S. Securities and Exchange Commission enforcement chief who led the agency’s pursuit of financial crime after the credit crisis, said he would step down.  Khuzami said in a memo today announcing his departure that he would remain at the agency for about two weeks. SEC Chairman Elisse Walter hasn’t named a successor.

In a statement, Walter said his “leadership and bold ideas transformed and reinvigorated the enforcement program.”

“We changed the institution we cherish by unleashing a culture of entrepreneurship, encouragement and opportunity that empowers individual staff members to generate new ideas and take ownership of their individual work and performance,” Khuzami said in his memo.

Still, his tenure has seen criticism from lawmakers, judges, investors and at least one current commissioner who have argued the agency hasn’t been aggressive enough in holding top executives accountable for practices that led to a taxpayer bailout of the banking industry.

U.S. District Judge Jed Rakoff, who presided over SEC cases against Citigroup Inc. (C) and Bank of America Corp., accused the agency of balking at bringing tough cases against high-ranking individuals in favor of reaching expedient settlements.

Commissioner Luis Aguilar, a Democrat, also expressed concern about the lack of financial-crisis cases against executives.  “The investing public has a right to expect that government regulators will continue to hold accountable those individuals responsible for misconduct — and that includes those culpable at the top, not just the flunkies below,” Aguilar said.

Khuzami, in his memo, dismissed much of the fault-finding as “often uninformed criticism” and praised the division’s lawyers for not letting it discourage them.

“It is a testament to your commitment and professionalism that you never permitted those distractions to become obstacles to excellence,” he said.

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