The Securities and Exchange Commission has announced that Julie M. Riewe and Marshall S. Sprung have been named Co-Chiefs of the Division of Enforcement’s Asset Management Unit.
The national specialized unit focuses on misconduct by investment advisers, investment companies, and private funds.
Ms. Riewe and Sprung have been serving as deputy chiefs of the Asset Management Unit since May 2012. They succeed Bruce Karpati, the unit’s inaugural Chief, who left in May.
Ms. Riewe has supervised a number of significant investigations into misconduct by mutual funds, hedge funds, and private equity funds involving portfolio valuation, performance, conflicts of interest, fees, and trading practices.
She has spearheaded notable investigations that resulted in enforcement actions against a registered investment adviser for a fraudulent securities offering made using various social media websites, against a proxy advisory firm for failing to safeguard proxy voting information, against hedge fund managers who fraudulently overvalued certain side-pocketed illiquid assets, and against private equity fund advisers who failed to value portfolio assets in accordance with its disclosed valuation methodology.
Ms. Riewe also has extensive experience leading investigations of insider trading and market practices involving asset managers, including the SEC’s insider-trading case against Mark Cuban and against a former private equity associate over whom the SEC prevailed at trial.
Mr. Sprung has supervised investigations involving all key enforcement program areas, including numerous matters involving investment advisers, private funds, and mutual funds. Sprung played a central role in the successful enforcement actions against investment adviser AXA Rosenberg and its founder for concealing a significant error in the computer code of a quantitative investment model that the firm used to manage client portfolios. Other notable investigations that Sprung has overseen include actions against a former $1 billion hedge fund advisory firm for scheming to overvalue assets under management, againstgatekeepers of two mutual fund trusts for causing untrue or misleading disclosures about the factors they considered when approving or renewing investment advisory contracts, and against a mutual fund trader who improperly profited by placing his own trades before executing large block trades for firm clients.
Ms. Riewe and Sprung have been instrumental in developing several proactive risk-based initiatives to address emerging risks in the asset management industry, including the cherry-picking initiative focusing on advisers’ preferential allocation of trades and investment opportunities, and the undisclosed adviser revenue initiative examining advisers’ undisclosed receipt of compensation from broker-dealers and their affiliates to reward the advisers for making certain types of investments.
'Julie and Marshall are exceptionally talented attorneys with significant expertise in this critical area of our enforcement program', said Andrew Ceresney, Co- Director of the SEC’s Division of Enforcement. 'They have been great partners and colleagues, and the strengths that each of them brings to the leadership of the Asset Management Unit will further enhance its mission and the SEC’s efforts to root out fraud by investment advisers, investment companies, and other asset management participants'.
Ms. Riewe said, 'I am looking forward to the privilege of leading, along with Marshall, the Asset Management Unit and its dedicated and talented staff'.
Sprung said, 'I am honored and excited to continue partnering with Julie as we build on the outstanding work of the Asset Management Unit staff to combat misconduct in the asset management industry'.
Before joining the SEC in 2005, Ms. Riewe worked for four years as a litigation associate at WilmerHale in Washington, DC and served as a law clerk to the Honorable Diana E. Murphy on the U.S. Court of Appeals for the Eighth Circuit. Ms. Riewe obtained her J.D. and M.P.P. from the Duke University School of Law in 1999 and received her undergraduate degree from Duke University in 1993.
Sprung joined the SEC in 2003 after working for five years as a litigation associate at Gibson, Dunn & Crutcher in Los Angeles, and serving as a law clerk to the Honorable A. Joe Fish on the U.S. District Court in Dallas. Mr. Sprung received his J.D. from New York University School of Law in 1996 and his undergraduate degree with honors from Brown University in 1993.