S.E.C. Names Interim Replacement for Khuzami

The Securities and Exchange Commission on Thursday named a veteran agency prosecutor, George Canellos, to be its acting enforcement chief, positioning him as one of the top cops on Wall Street.

The appointment will fill a crucial spot that opened with the looming departure of Robert Khuzami, a former terrorism prosecutor who joined the S.E.C. in the wake of the financial crisis. Mr. Khuzami was credited with revamping the agency’s enforcement unit after it suffered embarrassing blunders like missing Bernard L. Madoff’s Ponzi scheme.

Mr. Canellos, who served as Mr. Khuzami’s top deputy, was long considered a front-runner to replace him. The pair are close friends and Mr. Canellos is believed to have benefited from Mr. Khuzami’s backing.

“George is highly respected for his intellect, prosecutorial instincts, and commitment to tough and fair enforcement of the federal securities laws,” Mr. Khuzami said in a statement. “His service will benefit both the S.E.C.’s talented and hard-working staff and the investing public.”

But it is unclear whether the “acting” appointment, which kicks in when Mr. Khuzami departs on Feb, 8, will be short lived. Elisse B. Walter, the S.E.C.’s chairwoman who named Mr. Canellos to the interim spot, is expected to step down later this year. President Obama last month nominated Mary Jo White, the former United States attorney in Manhattan, as her replacement, opening the agency’s roster to significant upheaval

Her appointment bodes well for Mr. Canellos, who cut his prosecutorial teeth under Ms. White in New York. He spent nearly a decade there, serving as head of the so-called major crimes unit and senior trial counsel for the Wall Street task force.

But Ms. White could choose to pick her own enforcement chief, and she is expected to attract a deep list of candidates. Mr. Canellos also faces opposition from some enforcement officials, who are seeking a broad leadership change after Mr. Khuzami’s four-year tenure.

Still, Mr. Canellos on Thursday beat out a range of candidates for the interim spot. Ms. Walter was reportedly interested in Matthew T. Martens, the enforcement division’s chief litigation counsel, and David P. Bergrs, director of the S.E.C.’s Boston office. Instead, Mr. Bergers will slide into the deputy role Mr. Canellos will soon vacate.

Mr. Canellos, an avid motorcycle rider until a recent crash landed him in the emergency room, came to Washington last year when Mr. Khuzami named him to the No. 2 spot. A former partner at the law firm of Milbank, Tweed, Hadley & McCloy, he previously served as head of the S.E.C.’s New York office, a hub for many of the agency’s biggest Wall Street enforcement cases, from July 2009 to June 2012. In that role, he oversaw some 400 enforcement lawyers, accountants and other investigators.

“It is an honor and inspiration to serve with such talented and dedicated colleagues throughout the SEC,” Mr. Canellos said in the statement. “I look forward to continuing to work with them as we emerge from a historic restructuring and confront new challenges.”