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A funny thing happened on Robert Khuzami's way to a $5 million-a-year job.
By funny I mean sickening; by sickening I mean a travesty of a mockery of a sham; by a travesty of a mockery of a sham I mean how the operatives at the SEC sometimes operate.
Robert Khuzami, the recent former head of enforcement at the Securities and Exchange Commission, just signed with powerhouse law firm Kirkland & Ellis, one of the nation's biggest corporate firms, for a deal that guarantees him $5 million a year for at least the next two years.
After that, who knows? He might work his way up to join the top slot prestidigitators, I mean professionals, at the firm, who are paid about $8 million a year.
Good for him. He's smart, aggressive, and knows how the games are played. He's a playa.
Not at the SEC, of course. There, as the top dog biting the behinds of Wall Street miscreants, the good-looking enforcement chief did a bang-up job chasing down inside traders like Raj Rajaratnam and Rajat Gupta.
And to his credit, he bit the bicycle wheels of the fast-moving Goldman Sachs, slowing them down enough to pay a $550 million fine in 2010 for misleading investors on a collateralized debt obligation (CDO) deal called Abacus.
You may know that round two of that fight – over whether or not Goldman's man, the Fabulous Fab Tourre, who put one part of Abacus together (there were several deals under the Abacus name), did so with the help of hedge fund honcho John Paulson to guarantee the product would fail and Paulson would reap a windfall – was just found guilty of fraud relating to the deal.
Here's what you probably don't know…
Goldman wasn't the only one doing this.
Another huge purveyor of built-to-blow-up CDO deals put together with the help of John Paulson was Deutsche Bank.
Here's something else you probably didn't know.
While Deutsche Bank was looked at, two years after Goldman was fined in July 2010, for doing exactly what Goldman did – only the name of their cherry bombs came under the START label – nothing ever came of the look through.
I searched and searched, but I couldn't find anything through the SEC's looking glass about them looking into Deutsche for duplicating the fraud that Goldman never admitted nor denied perpetuating.
In 2012 the German magazine Der Spiegel broke the story that the SEC was looking at Deutsche's dealings on the slippery slopes of slicing and dicing synthetic CDOs into potable H-bombs. But there's no après-ski happy ending, or any ending at all that I could find. Not even on the SEC's website (here), where a host of dispositions on the same subject are listed.
Want to know why?
Well, here's something you probably don't know.
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
He helped develop what has become known as the Volatility Index (VIX) - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of 10X Trader, Shah presents his legion of subscribers with the chance to earn ten times their money on trade after trade.
Shah is also the proud founding editor of The Money Zone, where after eight years of development and 11 years of backtesting he has found the edge over stocks, giving his members the opportunity to rake in potential double, triple, or even quadruple-digit profits weekly with just a few quick steps.
Shah is a frequent guest on CNBC, Forbes, and Marketwatch, and you can catch him every week on Fox Business's "Varney & Co."
He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.