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SEC enforcement director is leaving agency

February 10, 2009|Associated Press

WASHINGTON — The top cop at the Securities and Exchange Commission is leaving the government less than a week after receiving an angry dressing-down before Congress over the agency's failure to detect a massive alleged fraud scheme.

The SEC said Monday that Linda Thomsen was leaving for the private sector but did not provide details. She has been the agency's enforcement director since May 2005.

Mary Schapiro late last month became SEC chairwoman, and it's not unusual for new heads of the agency to replace the enforcement director. But Thomsen became a lightning rod for criticism over the SEC's failure to detect the $50-billion Ponzi scheme allegedly run by money manager Bernard Madoff, despite red flags raised to the agency staff by outsiders over the course of a decade.

The announcement of Thomsen's departure came a few days after Schapiro outlined new actions intended to strengthen and speed the agency's enforcement efforts.

Thomsen was front and center Wednesday at a hearing by a House subcommittee investigating the Madoff case and the enforcement breakdown at the SEC. She was put on the defensive by lawmakers and forced to defend the SEC's position that she and other officials couldn't publicly discuss details of the matter because of a continuing investigation by the agency's inspector general.

A replacement for Thomsen wasn't named. Speculation centered on Robert Khuzami, a former federal prosecutor who is managing director and general counsel of investment firm Deutsche Bank. SEC spokesman John Nester declined to comment.

Thomsen, who was the first woman to hold the chief enforcement job at the SEC, had been deputy enforcement director before taking the top spot. As enforcement director, she led the SEC investigation of fallen energy giant Enron Corp., which began in late 2001, and a number of other high-profile cases.

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