SEC enforcement director to leave at year end

The Division of Enforcement, the SEC's largest, ramped up its enforcement actions in private equity this year.

Andrew Ceresney, head of the US Securities and Exchange Commission’s Division of Enforcement, will depart by the end of 2016 after serving for almost four years, Agri Investor sister publication Secondaries Investor reported.

Ceresney’s replacement will not be named until the agency fills the vacancy at the top following Mary Jo White’s announcement last month that she would step down as SEC chairwoman, sources said.


The division, the SEC’s largest, ramped up its enforcement actions in private equity this year.

In August, Apollo Global Management agreed to a $52.7 million settlement with the agency, which charged the firm for allegedly misleading limited partners in four funds about fees and a loan agreement, and for failing to supervise a senior partner who charged personal expenses to several funds.

Energy-focused firm First Reserve paid a $3.5 million settlement in September for allegedly allocating fees, expenses and insurance premiums to some of it funds so the firm itself would avoid paying them, and for negotiating legal fee discounts for the firm but not the funds, according to a cease-and-desist order from the regulator on 14 September.

Under Ceresney’s leadership, the Division of Enforcement saw a record number of enforcement actions and monetary remedies across asset classes, having filed more than 2,850 actions and obtaining more than $13.8 billion in judgements and orders for remedies, the SEC said in the announcement.

Within the realm of investment advisors and companies, the agency filed a record number of more than 475 actions, including 11 private equity firms-related cases, the SEC said.

Last year there were two landmark private equity cases, with a near-$30 million settlement from KKR over broken deal expenses and a near-$39 million settlement from Blackstone over monitoring fees.

The Ceresney announcement follows a string of departures already announced in the past month, following the US presidential election on 8 November. Less than a week after the Republican Party nominee Donald Trump took home the victory, SEC chairman White stated her plan to leave the agency at the end of the Obama administration.

Other than White and Ceresney, there have been at least five other SEC professionals who have decided to leave, either this year or in January 2017, including division of corporation finance director Keith Higgins, chief economist Mark Flannery and trading and markets director Stephen Luparello.

Ceresney initially joined the agency in April 2013 from Debevoise & Plimpton where he was a litigation partner and co-chair of the firm’s White Collar Group. Earlier in his career, he was a deputy chief appellate attorney in the US Attorney’s Office for the Southern District of New York. There, he also was a member of the securities and commodities fraud task force and the major crimes unit, according to the SEC announcement.

He began his career as a law clerk in the US Court of Appeals for the Second Circuit and the US District Court for the Southern District of New York.

Stephanie Avakian, the current deputy director of the Division of Enforcement, will become acting director until the SEC finds a permanent replacement, Thursday’s statement said.