2016-259
Washington D.C., Dec. 8, 2016 —The Securities and Exchange Commission today announced that Enforcement Director Andrew J. Ceresney will leave the agency by the end of the year.
During his nearly four years as head of the agency’s largest division, Mr. Ceresney implemented approaches that strengthened the Division’s investigative and litigation practices and enhanced its effectiveness and impact. Under his leadership, the Enforcement Division brought significant cases across the entire spectrum of the securities industry, achieving record numbers of enforcement actions and monetary remedies.
“Under Andrew’s strong leadership, the Enforcement Division took its already robust enforcement program to an even higher level, achieving unprecedented results, including a record number of enforcement actions, first-of-their-kind cases and a first ever admissions policy for a civil law enforcement agency,” said SEC Chair Mary Jo White. “Andrew’s tremendous work ethic, commitment to do what is right, and deep dedication to his entire team have made him an incredibly effective leader. America’s investors and our markets have been extremely fortunate to have him fighting in their corner for the last four years. And I am very grateful for his wise counsel, impeccable judgment and expertise.”
Mr. Ceresney said, “My time as Enforcement Director has been the highlight of my career, allowing me to work closely with the extremely talented and dedicated group of professionals in the SEC’s Enforcement Division. I am immensely proud of what we have accomplished together – our innovative and wide-ranging actions have protected investors, deterred misconduct, and sent the message that the SEC is and always must be the tough cop on the financial beat. I am particularly grateful to Chair White for the opportunity to work under her leadership and her deep commitment to strong enforcement to protect investors and our markets.”
During Mr. Ceresney’s tenure, the Commission filed more than 2,850 enforcement actions and obtained judgments and orders totaling more than $13.8 billion in monetary sanctions. The SEC also charged over 3,300 companies and over 2,700 individuals, including many CEOs, CFOs, and other senior corporate officers. The Division’s actions under his leadership involved every priority area, including:
- Issuer Reporting and Disclosure and Gatekeepers – The Division refocused its enforcement efforts on financial reporting matters. It filed more than 370 issuer reporting and disclosure cases and more than 210 accountant-related Rule 102(e) proceedings, including: fraud charges against Weatherford International and two senior executives for misstating tax reserves; fraud charges against Computer Sciences Corporation and former executives for manipulating financial results and concealing significant problems with a large and high-profile contract; and proceedings against BDO USA and five of its partners, Grant Thornton LLP and two of its partners, and Ernst & Young LLP and two of its partners, for professional failures in audits of clients that faced SEC actions.
- Market Structure and Complex Manipulation Schemes — The Division filed cases against seven firms operating significant Alternative Trading Systems, including Barclays Capital Inc., Credit Suisse Securities (USA) LLC, and ITG Inc. and its affiliate AlterNet Securities; filed seven cases under the Commission’s market access rule; and, in a groundbreaking action, filed charges against dozens of hackers and traders in and outside the U.S. for allegedly hacking into multiple newswire services to steal hundreds of corporate earnings announcements and trading on this information before it was publicly released, generating more than $100 million in illegal profits.
- Insider and Abusive Trading — The Division filed more than 150 actions related to insider and abusive trading, including against a prominent hedge fund manager and his firm; two hedge fund managers and their source, a former U.S. Food and Drug Administration official; and a well-known Las Vegas gambler and his source, a corporate board member.
- Investment Advisers and Investment Companies — The Division filed a record number of more than 475 investment adviser or investment company-related actions. These actions included 11 cases involving private equity firms and a significant conflicts of interest case against two JPMorgan wealth management subsidiaries.
- Enforcement of the Foreign Corrupt Practices Act — In the fiscal year that just ended, the Division filed 21 actions involving violations of the Foreign Corrupt Practices Act – the most in the SEC’s history. The FCPA cases filed in the last few years were highly impactful, including those against a hedge fund and its sitting CEO and CFO, a Dutch telecommunications company, and three cases involving violations of the FCPA through hiring practices or the provision of valuable internships – against JPMorgan Chase & Co., Qualcomm Incorporated and BNY Mellon.
- Complex Financial Instruments — The Division filed a critical customer protection rule case against Merrill Lynch, the settlement of which involved admissions of wrongdoing and hundreds of millions of dollars in monetary sanctions; a first-of-its-kind settlement with a major ratings firm (Standard & Poor’s); and the first three sets of charges – against UBS AG, Merrill Lynch, and UBS Financial Services – involving misstatements and omissions by issuers of structured notes to retail investors.
- Public Finance Abuses — The Division paved new ground in public finance enforcement, including charges against 72 municipal underwriting firms – comprising approximately 96 percent of the market share for municipal underwritings – and 71 municipal issuers and other obligated persons for violations in municipal bond offerings as part of the Municipalities Continuing Disclosure Cooperation (MCDC) Initiative; fraud charges against Ramapo, N.Y., its local development corporation, and four town officials; and the City of Miami and its former budget director, which resulted in a first-of-its-kind trial victory.
- Microcap Fraud and Pyramid Schemes – The Division formed the Microcap Fraud and Pyramid Scheme Task Forces to combat these types of fraud, which primarily impact retail investors. The Division increased the Commission’s use of its temporary trading suspension authority and prioritized bringing numerous actions against gatekeepers and repeat players in the microcap and pyramid scheme markets.
In addition, under Mr. Ceresney, the Division made significant enhancements to its investigative processes, settlement approaches, and trial program, including:
- The Division vastly increased its use of data and data analytics to detect and investigate misconduct. Among other things, the Center for Risk and Quantitative Analytics, created in July 2013, over the last two years has provided data analytic expertise for over 100 cases against more than 200 entities and individuals in matters involving insider trading, hedge funds, municipal issuers, and complex financial instruments, and the Market Abuse Unit’s Analysis and Detection Center has developed new analytical tools to help identify and investigate potential insider trading.
- The Division implemented a new settlement protocol requiring defendants in certain cases to make admissions of wrongdoing. Since the admissions policy was instituted, the Commission has obtained admissions from approximately 80 parties.
- The whistleblower program surpassed the $130 million mark for awards, and tips in fiscal year 2016 surpassed 4,200, rising over 40 percent from 2012, the first fiscal year the program was in place. The Division also brought five settled actions for violations of Rule 21F-17 for impeding communications by whistleblowers with the Commission through separation and confidentiality agreements, and two cases involving retaliation against whistleblowers.
- The Division’s enhanced its trial capacity– the SEC has not lost a jury trial in federal district court in over two and a half years. The Division’s favorable jury verdicts occurred in very significant cases, including cases against two brothers accused of violating the laws governing ownership and trading of securities by corporate insiders; insider trading cases against two brokerage employees and a pharmaceutical executive and a U.K. resident; and a first-ever case against a recidivist municipality and one of its city officials. The Division also achieved a strong record of success in administrative proceedings before the SEC’s administrative law judges.
Prior to joining the SEC in April 2013, Mr. Ceresney served as a litigation partner in the law firm of Debevoise & Plimpton LLP and was co-chair of its White Collar Group. Prior to that, he served as Deputy Chief Appellate Attorney in the United States Attorney’s Office for the Southern District of New York, where he also served as a member of the Securities and Commodities Fraud Task Force and the Major Crimes Unit. Mr. Ceresney served as a law clerk to the Honorable Dennis Jacobs, formerly Chief Judge of the U.S. Court of Appeals for the Second Circuit, and to the Honorable Michael B. Mukasey, formerly Chief Judge of the U.S. District Court for the Southern District of New York. Mr. Ceresney is a graduate of Columbia College and Yale Law School.
Upon Mr. Ceresney’s departure, Stephanie Avakian, Deputy Director of the SEC’s Enforcement Division, will become the Acting Director. Ms. Avakian joined the SEC in June 2014 from the law firm of Wilmer Cutler Pickering Hale and Dorr LLP, where she was a partner in the firm’s New York office and a vice chair of the firm’s securities practice. She previously worked in the SEC Enforcement Division as a branch chief in the New York Regional Office, and later served as a counsel to SEC Commissioner Paul Carey. Ms. Avakian obtained her bachelor’s degree magna cum laude from the College of New Jersey, and her law degree magna cum laude from Temple University’s Beasley School of Law.
