SEC Ups Effort with Whistleblower Awards, Enforcements and New Appointments

Two appointments at the agency, an enforcement action, and $2 million awarded to 3 whistleblowers, all announced today by the
Photo: Bloomberg

It was a busy day for the United States Securities and Exchange Commission (SEC) as the agency cranked out several announcements reflecting the multitude of efforts underway for one of the busiest financial market regulators tasked with policing the US stock exchanges.

Today the agency announced two key appointments, one for a newly created division named the Office of Risk and Strategy, and one within its Office of Compliance Inspections and Examinations (OCIE) which oversees the new division. These efforts are underway as the regulator aims to implement effective market oversight using data-driven approaches, in order to keep up to speed on all the information generated from HFT and high-volume trading venues.

New division and appointments

According to the SEC press release Peter B. Driscoll will head the new office and was named its first Chief Risk and Strategy Officer where he will manage the Investment Adviser/Investment Company examination staff located Washington, D.C. Robert M. Fisher has been named Managing Executive of the Office of Compliance Inspections and Examinations (OCIE). Dr. Fisher was quoted in the release saying: “I am extremely proud to be working with such a great and dedicated team in OCIE to support the vital mission of protecting investors.”

The creation of the new office will help consolidate OCIE’s risk assessment, market surveillance, and quantitative analysis teams and provide operational risk management and organizational strategy, as part of a streamlined approach according to the SEC.

Allegations against Steven Zoernack

In addition, the SEC announced enforcement action against a person who had gone to great lengths to hide his background of criminal charges. Commenting with regard to that news,  Antonia Chion, Associate Director of the SEC’s Enforcement Division, said: “We allege that Steven Zoernack deceived investors by spreading false and misleading fund information while doing everything possible to bury his criminal history and troubling financial record.”  According to the SEC, neither Zoernack nor his company EquityStar were registered with the SEC or any state regulator for that matter. The allegations will be scheduled for a public hearing before an administrative law judge, who will prepare an initial decision stating what, if any, remedial actions are appropriate.

$2 million award to 3 individuals

And finally, the agency said that it has awarded some $2 million to whistleblowers, in accordance with its initiative encouraging people to come forth with information. Rewards are given if the data provided leads to certain actions or investigative findings by the SEC, such as charges or complaints. The program has paid more than $57 million to 26 whistleblowers since it started in 2011.

“We’re seeing a significant uptick in whistleblower tips over prior years, and we believe that’s attributable to increased public awareness of our program and the tens of millions of dollars we’ve paid to whistleblowers for information that helped us bring successful enforcement actions,” said Sean X. McKessy, Chief of the SEC’s Office of the Whistleblower.

 

The news follows Finance Magnates coverage yesterday of the agencies’ participation in last week’s Senate Banking Committee along with FINRA.

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