More News From Mary Schapiro. Brace Yourself.

The SEC just announced the appointment of a new director of enforcement, a gent named Robert Khuzami. Here's an AP story on the appointment. I view this as good news and bad news, with the bad far outweighing the good.

First the good news: I must admit I've never heard of the gent, but evidently he was a crackerjack federal prosecutor in Manhattan a few years ago, and handled a bunch of high visibility cases. One involved a character named Lino, who was ran brokerages for the Bonnano crime family.

According to the SEC release: "As Chief of that Office's Securities and Commodities Fraud Task Force for three years, Mr. Khuzami prosecuted numerous complex securities and white-collar criminal matters, including those involving insider trading, Ponzi schemes, accounting and financial statement fraud, organized crime infiltration of the securities markets, and IPO and investment adviser fraud."

The bad news is that he is general counsel of Deutsche Bank, and no doubt will go back to Deutsche Bank, or some other esteemed institution, at much higher pay, once his time as SEC enforcement director is at an end.

Now, honestly, is there any place on God's green earth where Mary Schapiro could have found an enforcement director other than one of the biggest multinational banks? Is she even the slightest bit interested in restoring investor confidence in her fairly-maligned agency?

I'm sure Khuzami is a terrific lawyer, but he's just too close to Wall Street to be both effective and reassuring to the public. His appointment is not only a bad idea, it is a depressingly bad idea.

© 2009 Gary Weiss. All rights reserved.