Linda Thomsen, the Securities and Exchange Commission’s director of enforcement since May 2005, quit today following severe criticism in the wake of the Bernie Madoff scandal.
In a statement today, the SEC confirmed that Thomsen was leaving the agency “to return to the private sector”.
Last week, Thomsen faced severe criticism from the US Congress over its handling of the Madoff affair and its failure to detect the $50bn Ponzi scheme he allegedly ran. The SEC’s new chair, Mary Schapiro indicated recently that efforts would be made to strengthen the agency’s enforcement capabilities.
“The irony is that for years she was criticised for being too aggressive,” said one New York partner. “Now it seems she has quit for not being aggressive enough.”
Speculation is already mounting as to Thomsen’s successor at the SEC, as well as her destination in the private sector. Shapiro’s comments last week have led to a belief both that the new SEC enforcement director will come from outside the agency and that he or she will be a former federal prosecutor with experience of criminal investigations.
The hot favourite to take over from Thomsen is Robert Khuzami, currently Deutsche Bank general counsel.
As for Thomsen, speculation is already mounting that she may return to her former firm, Davis Polk & Wardwell.
Davis Polk has a history of taking back its former lawyers after spells with the government. Last year, financial institutions group partner Annette Nazareth returned to the firm after 10 years at the SEC.
Neither Davis Polk nor Deutsche Bank were available for comment.