The Senate Committee on the Judiciary heard testimony yesterday on what might be called the current state of rejuvenating SEC Enforcement. Witnesses included Division Director Robert Khuzami, Fort Worth Regional Office Director Rose Romero and SEC Inspector General H. David Kotz.

Mr. Khuzami highlighted the reorganization efforts he initiated after assuming the position of Division Director, noting that those efforts are now complete. Tying his appearance back to his December 2009 testimony titled “Mortgage Fraud, Securities Fraud and the Financial Meltdown; Prosecuting Those Responsible,” Mr. Khuzami told the Committee ‘we have achieved significant results’ but “much more work [remains] to be done.”

According to the Director, significant results were achieved in fiscal year 2010 while undertaking and completing the largest reorganization in the history of the Division. This includes filing 634 enforcement actions; obtaining disgorgement orders totaling $1.53 billion; securing orders requiring the payment of $968 million in penalties; obtaining 45 emergency temporary restraining orders and 56 asset freeze orders; and distributing nearly $2 billion to injured investors from 42 separate Fair Funds. While these statistics are impressive, it is noteworthy that no bench marks from prior years were offered for comparison.

SEC Enforcement has also brought a number of significant cases the Director told the Committee. These include the actions against: Goldman Sachs & Co. which is settled (here); ICP Asset Management LLC which is in litigation (here); Lee B. Farkas, the former chairman of Taylor, Bean & Whitaker (here) which is in litigation; Citigroup which is tentatively settled although the Court has, to date, declined to accept the agreement (here); LACE Financial Corp, a credit rating agency, which is in litigation (here); Morgan Keegan & Co. which is currently in trial (here); State Street Bank, which is settled (here); and the Moody’s Investor Services Section 21(a) report declining to bring an enforcement action because of jurisdictional concerns (here). The Director did not comment on the fact that the Division appears to be litigating more cases while facing increased scrutiny from district court judges regarding the terms of its settlements.

The Director also gave the Committee a good overview of the management reorganization implemented to streamline the Division and make it more efficient. At the same time, it is clear that the remarks understate the work which remains to be done. This is particularly true with respect to the market crisis investigations (here) which were the subject of the Director’s December 2009 testimony.

Ms. Romero largely reiterated the Director’s comments. She began by telling the Committee of her regret that “the SEC failed to act more quickly to limit the investor losses suffered by [Robert Allen] Stanford’s victims” (here). Ms. Romero went on to recount for the Committee the significant actions the Commission has taken since filing its case against Mr. Stanford and his entities in 2009. This discussion included steps taken to improve the inspection and enforcement processes in the Fort Worth office. She also told the Committee that “several former Stanford executives” recently received Wells notices and that the investigation is continuing, clearly indicating that more enforcement actions will be brought.

Finally, Mr. Kotz summarized his report on the inspection and investigative efforts taken several years prior to the filing of the action against Mr. Stanford and his entities. This mixture of fact, hindsight and supposition is in a report prepared by the IG’s Office which was available at the end of March 2010. He concluded by reiterating the recommendations for new procedures from the report most, if not all of which, have been implemented.

Overall the testimony presented a picture of a program in transition. Significant management and organizational changes have been initiated and completed. The program is moving forward beyond the past. While the change is significant and the results are positive, SEC Enforcement might well keep in mind a famous line written in 1922 by American poet Robert Frost in “Stopping by Woods on a Snowy Evening:” “But I have promises to keep, And miles to go before I sleep.”