Circle Jerk 101: The SEC's Robert Khuzami Oversaw Deutsche Bank's CDO, Has Recused Himself Of DB-Related Matters

Tyler Durden's picture

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Cursive's picture

The revolving door?  I wish we didn't have regulatory capture, but we do.  I agree with Tyler's comments in that we need knowledgeable people to prosecute the case.  My solution:  Offer a $10B bonus to the legal team that brings down Wall Street.  Fighting fire with fire....

anonnn's picture

...he has recused himself from any matters related to Deutsche Bank...

Absurd. He's an interested party [as in party to a crime, or has inside data on the workings of such] recusing himself? 

He's not sitting in judgement. Mighty convenient for GS et al...and do not sell short the et al. 

sangell's picture

Is this like Eliot Ness hiring Bugs Moran's lawyer to prosecute Al Capone?

Cheeky Bastard's picture

[description unnecessary]

spekulatn's picture

That be some funny shit, CB. Well played.

Problem Is's picture

"Oh Porcelain God, I pray to thee...

Allow my head to stop pounding...

Allow the heaving of my entrails into daylight to cease...

I promise dear Lord never to mix tequila poppers, licking the breasts of the tequila popper bar maid and PBR injected beer bongs to enter the temple of my body on the same night...

Please Oh Porcelain God, forgive me and give me a day of rest..."

JW n FL's picture

I hope you are feeling better Cheeky Bastard, I read more than a few posts ago you where under the weather... May I offer you a lil advice? The Bahama's and / or St.Lucia if you want something with a lil more topo to stare at.


Be well Cheeky, best wishes to you and a speedy recovery as well, JW

anonnn's picture

Driving the porcelain bus?

The Coach Division of American Standard?

Atomizer's picture

Robert Khuzami must have watched how to polish a TURD via MythBusters. Who knew what level of knowledge Khuzami held.

brown_hornet's picture

Sounds more like Jake Cutler saying he won't play the Broncos cuz he used to be on their team.

JW n FL's picture

****** "In his seven years at the German bank, Mr. Khuzami took a hands-on role, including when he was general counsel for the Americas from 2004 to 2009." ******


So.... Mr. Khuzami is in fact there to pursue himself and prosecute himself?


****** "SEC officials say Mr. Khuzami's résumé is a nonissue" ******


Seriously? a non-issue? so... the question becomes? who investigates the guy investigating? and how much dirt do the other players have on Mr. Khuzami? so as to insure that no prosecutions ever see the light of day?


****** "The SEC has sent requests for information to Deutsche Bank" ******


Why? Why not just walk down the hall and ask Mr. Khuzami? what happened? need a warrent? get one.


Same Shit!.... Different Day!

Rusty_Shackleford's picture

"So.... Mr. Khuzami is in fact there to pursue himself and prosecute himself?"



You simply cannot make this shit up.

ajax's picture

"a bon chat bon rat", Fab le fab.

mister_x's picture

I'm actually OK with this. A variation on "takes a crook to catch one". Hopefully, now the SEC is not as badly matched as I had feared earlier.

JW n FL's picture

If they where as honest a person as you... I would agree, but it serves them (ALL!) not... to be honest in anything that they would do.


He is the person who wrote the loopholes into the contract, I am sure barbed the buyside as well for hold harmless acts of God... BlackSwan and / or the like...


I really would like to be wrong, but the law if averages and my magic 8 ball... tell me we are still getting more of the same, once again I would LOVE! to be wrong for all of our benefits.

girl money's picture

Might as well abolish the SEC and the ratings agencies.  I'm investing as if they don't exist and the whole ship is gonna get torpedoed... again.

This is Vegas, baby, without the endless breakfast bars.  Place your bets, but know that the House always wins. 


sangell's picture

Come to think of it, is this why Goldman's general counsel Greg Palm could say there has been 'no contact' between the DoJ and GS? I would have thought bringing in Federal prosecutors and FBI agents would have been de riguer once civil fraud was found.

No point in making a 'federal criminal case' out of something that could blow up in the SEC's face now is there.

Transor Z's picture

This is just standard Rule 1.11 conflict of interest stuff in the law. You'll never find an experienced government regulatory litigator in ANY field who doesn't have a conflict. How the hell do you people think you get competent prosecutors/litigators with insights into how things in the private sector really work -- by working only in government?


Kind of a dumb post.

Atomizer's picture

How is the wealth distribution and new employment program working out for you?


Law of the UCC: Uniform Commercial Code

Law of the UCC: Uniform Commercial Code


Shut up mouth breather!! Your apart of this current problem. We need to take back our country. Many of us produce jobs and create goods & services. Your lazy ass will find obsolescence.

The Obsolete Man


This State has many fears. Why do you think Microsoft just launched KIN. It's to collect information for the state to turn you into obsolete.

If your too sick, a panel will consider your obsolescence to save the State on your needless non-productive activity under UCC code.

One day. you will be told that you have no function.

Wake up friend. Knowledge is power.

Transor Z's picture

One day. you will be told that you have no function.


"Friend," looks like you need to take a trip to Conjunction Junction:

ToNYC's picture

To live outside the law, you must be honest. It takes one to know one. Would you rather a celibate Pope tell you about marriage?

Careless Whisper's picture

seems like DB was smart enough to place some of their peeps in government too. this is getting pathetic.

LeBalance's picture

As per their tranny porn issue (something TD strictly avoids, pious as he is), how can your first question for their personnel not be: "And how many times a day do you masturbate in the office?" Does this perception (although incorrect for many SEC personnel) seem damaging to their ability to walk into a room and be taken seriously?  Is everyone they meet checking out their crotch bulge to see if their multi-daily workouts have had any effect?

The inability of the SEC to see that they needed to burn that gentleman at the stake makes the SEC beyond toast.  They are a laughingstock.

The inability of the larger government to see that this situation reflects unimaginably badly on them and therefore they must act in lieu of the SEC destroys them as well.

A variant on Gresham's is probably: "Once an honest man is completely convinced of the morbid dishonesty of an enterprise, he will no longer participate."

Problem Is's picture

"The incest continues: SEC's chief investigator, Robert Khuzami, used to be general counsel for Deutsche Bank, and presumably reviewed numerous CDO-related transaction..."

That's Funny Tyler...
I was reading headlines and was hijacked to a webpage of Barry Ritholtz's pontifications where Buh-Bye Barry made the following pompous assertions:

Buh-Bye Barry's Ringing Endorsement 

10 Things You Don’t Know (or were misinformed) About the GS Case

"2. Robert Khuzami is a bad ass, no-nonsense, thorough, award winning Prosecutor This guy is the real deal — he busted terrorist rings, broke up the mob, took down security frauds. He is now the Director of SEC enforcement. He is fearless, and was awarded the Attorney General’s Exceptional Service Award"

Further Hyperbole:
"Busted Terrorsit Rings"... Wait are you talking about GS?

<"When you prosecute mass murderers who use guns and bombs and threaten your life, and you kick their asses anyway, you ain’t afraid of a group of billionaire bankers and their spreadsheets. He is the shit. My advice to anyone on Wall Street in his crosshairs: If you are indicted in a case by Khuzami, do yourself a big favor: Settle."

Buh-Bye Barry's Self Qualifications
"I put together this list based on what I know as a lawyer, a market observer, a quant and someone with contacts within the SEC."

"10. I’m not a lawyer, but . . . Then you should not be ignorantly commenting on securities litigation. Why don’t you pour yourself a tall glass of STF up and go sit quietly in the corner."

After Being Hijacked to Ritholz's Pontifications...
I erased my browser history and went into the bathroom to puke like the guy pictured above...

Now, Buh-Bye Barry maybe right about somethings. Does he have to be such a... such an... overly opinionated Ass Hole Attorney about it?

illyia's picture

I was just about to mention the same.

Regardless Barry, Khuzami turns out to be an interesting player...

AnonymousMonetarist's picture

 The good: he probably knows more about CDOs than any other person in government administration history, and thus would not have brought on the Goldman case without being aware of all the potential tripwire nuances (and yes, if the Goldman case gets to the discovery stage, which it will, it is game over for Goldman's defense strategy, which means settlement and/or much worse). 

Translation : Listen we can squeeze Goldie and they will squeal because they know its' BS, so the more we squeeze the more they will squeal that its' Anti-american! But who cares! Never let the facts get in the way of a slam-dunk argument! Who'll take Goldie's side in public? No one! They are toxic baby!  They won't be able to beat the pablum narrative so they won't just want to settle, they'll drag it out, and it's  a no-lose cause discovery will make 'em look greedy and the court of public opinion has already rendered the verdict of greedy before guilty.Hey they will never be able to get a non-prejudiced jury and by the time we get there we'll score PR point after PR point after PR point which will help obfuscate how we saw nothing and did nothing and knew nothing. So let's go after nickels to absolve ourselves of lettin' the crooks steal gold bars out the back. We're the ones golden on this one folks! Trust me!

Fraud-Esq's picture

I'm ok with this and Zhuzami hasn't lost my confidence yet. He's done strong work since he's been appointed. He spent ample time in the MidWest too. Always a plus

JW n FL's picture
by Fraud-Esq
on Sat, 04/24/2010 - 15:04

I'm ok with this and Zhuzami hasn't lost my confidence yet. He's done strong work since he's been appointed. He spent ample time in the MidWest too. Always a plus


                Huh?! what in the FUCK?!! does him watching "HEE!! HAW!!! (" and seeing "the The Corn Welfare System (" first hand have to do with him doing his Job? STFU and shot yourself.... go back to the Republican Party.. they miss you and want to talk about abortion... go spread the word and pray for the end... Whatever useless shit that makes you happy.

Fraud-Esq's picture

Another example of how ZH folks have to learn to roll with the punches. Zhuzami worked at a bank. It happens. He could be as disillusioned about it as you. Why did he take a low paying job at the SEC? He's a litigator. He could have cashed in on defending banks as demand for defense skyrockets. He's only been at the SEC since Jan 09. He deserves the benefit of the doubt. Conflicts happen and he recused himself. That's GREAT news. Had Hank Paulson done that...we might all be in a different place. How can we complain? They did the RIGHT thing. Ask why Hank didn't. Ask why the guy at the FED was able to buy Goldman stock with a waiver while he was a regulator. The SEC has a horrible legacy over the past ten years. We have to applaud when they do the right thing today. Institutions and people respond to crowds. It's a big ship that is turning. That's how ships turn. Not even Goldman was able to turn their ship perfectly when the smartest people there knew the mortgages would crash. They still had to work the inside and turn the ship. They could have made even MORE money had they been smarter and quicker. The crowds can't act as neurotic as they have been for ten years with our rewards/punishments for good and bad behavior. 2 + 2 = 4. Admitting your conflict is good. Suing a material omission is good. We have to stick to that, no matter who's behind the curtain, Obama, Jim Smith or the Rolling Stones. 

bullwinkle's picture

Not exactly ground breaking news from WSJ.  The SEC has this info right on their website:


I'd say lets give the guy a chance before we hang the noose from the nearest tree.

overbet's picture

This and most Friday afternoons, when Barrons publication is going to feature a stock with a market moving article, that stock will trade significantly more than usual volume in the after hours session and if its a positive mention the stock will trade way up and if its a negative mention the stock will trade way down. Yesterday tickers GES,  RMBS and FISV all traded much more volume after hours session than normal and traded much higher in the case of GES and FISV and much lower in the case of RMBS which is right inline with their Barrons mentions today. I have complained about this in the past to the SEC as well as to Barrons and other media outlets. My complaining appeared to slow the frequency but it is still occurring regularly. This is not something that is hard to to back test and prove. Take notice for yourself. Every Saturday when Barrons puts out their publication check the time and sales of the stocks on Fridays after hours. Someone is getting the info of what will be mentioned and trading on it.  I would wager half of my trading account that those trades week after week could be linked to the same person. Just look at all the stocks featured in Barrons weekly publication and look at the time in sales for those stocks the Friday after hours session prior to their being mentioned in Barrons. The really obvious part is that these stocks typically do NONE to very little volume after hours but on the Fridays before they are to be mentioned in Barrons they do a ton. Like RMBS yesterday someone is holding 50k shares on the offer down 2.5% That NEVER HAPPENS after hours without significant news. I have began documenting these occurrences as well as my complaints to Barrons and the SEC in case I need them in the future. This activity is stealing in my eyes and illegal. It needs to be stopped. Please file a complaint about this to the SEC via the link below. Any little bit we can do to stop insider trading will help.

JW n FL's picture

+ 1 for effort... plus (+) a Trillion for action(s)...

Akrunner907's picture

When I met Rob Khuzami last year, I knew he was an ex-DB top guy.  I still give him the benefit of the doubt, as he has gone through and started doing some re-engineering at the SEC.  I hope that he turns out to be a white knight for the public when it relates to the securities world.

tupac shakur's picture

He took this role more than 1 year ago. At the time, no one seemed to mind the obvious "revolving door" issue.

"Since 2004, Mr. Khuzami, 52, has been General Counsel for the Americas at Deutsche Bank. In that role, he has supervised more than 100 lawyers supporting the bank's various businesses in the Americas, and has overseen Americas-based litigation and regulatory enforcement actions. From 2002 to 2004, he served as Global Head of Litigation and Regulatory Investigations for the bank."

tupac shakur's picture

He assumed this role more than 1 year ago, in a move that seemed to guarantee DB immunity from prosecution. At the time, no one seemed to mind the obvious "revolving door" issue.

"Since 2004, Mr. Khuzami, 52, has been General Counsel for the Americas at Deutsche Bank. In that role, he has supervised more than 100 lawyers supporting the bank's various businesses in the Americas, and has overseen Americas-based litigation and regulatory enforcement actions. From 2002 to 2004, he served as Global Head of Litigation and Regulatory Investigations for the bank."