The Securities and Exchange Commission's new enforcement chief thinks one way to speed up investigations is to keep the clock ticking — both for any alleged offender and for his own staff.
So Robert Khuzami is curtailing the regular use of so-called tolling agreements, in which his office and respondents both agree to suspend the statute of limitations while they try to resolve a civil or administrative action.
The agency's critics, and some former officers, say the change will speed up the SEC's enforcement process. Cases with tolling agreements typically languish for years — sometimes long enough for respondents to die in the interim.
Without such agreements the SEC loses its most significant enforcement powers if it lets a case stretch beyond the five-year statutory limit for financial wrongdoing: It then cannot impose financial penalties or bar advisers from the industry.