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Public Statement by SEC Staff: Commission Credits Individual Under Cooperation Initiative

Robert Khuzami

Director, Division of Enforcement
U.S. Securities and Exchange Commission

March 19, 2012

In January 2010, the Commission established a formal program to encourage and reward individuals who cooperate in SEC investigations and litigation. This Cooperation Initiative recognizes that the first-hand evidence of wrongdoing possessed by cooperators can significantly enhance the Commission's ability to stop fraud, secure strong settlement and trial outcomes and return funds to harmed investors. In particular, cooperating witnesses enable the Commission to investigate misconduct more quickly and efficiently due to the high-quality nature of their evidence; increase the likelihood of stopping ongoing misconduct, thus minimizing the amount of investor loss and number of victims; unlock the intricacies of cases involving complex markets, transactions and products; and build more and better cases against the organizers, leaders and other higher-ups who cover their tracks and operate through subordinates. The AXA Rosenberg matter reflects some of these benefits, as the senior executive cooperated early in the investigation, provided substantial assistance in the investigation, gave complete and truthful information, and facilitated the investigation of a complex and high priority case involving quantitative investment models. Due in part to his assistance, the SEC brought two enforcement actions in rapid succession, returned $217 million to victims, and imposed additional penalties totaling $27.5 million. This demonstrates that the Enforcement Division fully recognizes the value of cooperation in SEC investigations, and will seek to reward such cooperation appropriately.

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