As advisors wait to see whether they'll be regulated by the Securities & Exchange Commission or FINRA, the SEC announced that its enforcement director, Robert Khuzami, will leave the agency, in a highly anticipated move.

In December, people with knowledge of the matter, said that Khuzami, who led the enforcement division for nearly four year, planned to step down this month. Sources last month said he notified SEC Chairman Elisse Walter of his decision in December. Walter has not yet chosen a replacement, the people said.

“I have spent half my career in public service, and nowhere is there the level of professionalism, skill, and talent on such a large and coordinated scale as there is in the SEC’s Division of Enforcement,” Khuzami said in a press release. “They have inspired me, educated me, and motivated me to do my very best, and for that I am eternally grateful.”

Khuzami, 56, was hired in February 2009 by then-chairman Mary Schapiro to help restore the agency’s image after it faced criticism for missing Bernard L. Madoff’s Ponzi scheme.

Under Khuzami’s leadership, the enforcement division filed actions connected to the financial crisis and brought a record numbers of cases involving insider trading and misconduct by investment advisors and investment companies. The division filed its most-ever cases in fiscal years 2011 and 2012 following the most significant restructuring in agency history that streamlined procedures and expedited investigations.

“Rob’s leadership and bold ideas transformed and reinvigorated the enforcement program,” Walter said in a press release.  “Under his direction, the Division not only produced record results, but embraced changes that in the years to come will enable the talented staff to better protect investors through increased efficiency, expertise, and strategic focus.”

After taking over the enforcement division in 2009, Khuzami made the division’s effort to pursue financial crisis misconduct priority number one. The division has since charged more than 150 individuals and entities with wrongdoing, including 65 CEOs, CFOs, and other senior corporate officers. These financial crisis-related cases have resulted in $2.68 billion in financial relief for harmed investors, and 36 individuals have been barred from serving as officers and directors at public companies or from working in the securities industry. 

He oversaw some of the biggest settlements in SEC history. Goldman Sachs Group Inc. agreed in July 2010 to pay $550 million over claims it misled investors about a mortgage-linked investment; Citigroup Inc. reached a $285 million settlement and JPMorgan Chase & Co. forfeited $154 million for their roles in similar deals.

In addition to the all-time record number of 735 SEC enforcement actions in 2011 and another 734 actions in 2012, Mr. Khuzami led the division to record results in a number of specific enforcement areas.  The SEC filed 293 enforcement actions involving investment advisers in fiscal years 2011 and 2012, the most ever in a two-year period.  There was a 60% increase in cases filed against broker-dealers in fiscal year 2011, and the number of filed actions increased another 19% in fiscal year 2012.  The SEC also filed 17 actions related to municipal securities in fiscal year 2012, the most in a single year since 2004.

Prior to joining the SEC, Khuzami served as a federal prosecutor for 11 years with the U.S. Attorney’s Office for the Southern District of New York, including three years as chief of its Securities and Commodities Fraud Task Force.