The Securities and Exchange Commission has announced that Kenneth R. Lench, chief of the Enforcement Division’s Structured and New Products Unit, will leave the agency for the private sector at the end of this month after more than 23 years of service.
Lench has served as head of the Structured and New Products Unit since its inception in January 2010. The unit conducts investigations into complex financial instruments including asset-backed and derivative securities, and has 45 staff in eight SEC offices across the country. During Lench’s tenure, the unit filed significant enforcement actions against financial services firms that violated federal securities laws during the financial crisis relating to the structuring, marketing, and sale of collateralized debt obligations (CDO) and residential mortgage-backed securities (RMBS). The CDO and RMBS cases filed under Lench’s leadership include Goldman Sachs, J.P. Morgan (CDO case and RMBS case), Citigroup, Credit Suisse, Mizuho, Wells Fargo/Wachovia, Option One, Stifel, Nicolaus & Co., and RBC Capital Markets. These cases provide for approximately $1.7 billion in financial recovery for harmed investors.
'Ken’s determination to always seek the right answers and his devotion to protecting investors by working tirelessly with his staff and colleagues made everyone around him better', said George S. Canellos, Co-Director of the SEC’s Division of Enforcement. 'The Enforcement Division is stronger today because of Ken’s unwavering leadership'.
Lench said, 'It has been a privilege to lead such a talented and dedicated team of professionals committed to uncovering wrongdoing in our securities markets. I am fortunate to have had the opportunity to work on significant and challenging cases on behalf of our nation’s investors'.
Lench joined the SEC’s Enforcement Division as a staff attorney in 1990. He was promoted to branch chief in 1995, assistant chief counsel in 2000, and assistant director in 2004. As an assistant director, Lench spearheaded the SEC’s major auction rates securities settlementswith a number of major broker-dealer firms that provided more than $60 billion in liquidity to tens of thousands of investors.
He also led significant investigations into matters involving financial and accounting fraud, Foreign Corrupt Practices Act violations, and hedge fund fraud cases. These include actions against Ernst & Young, Electronic Data Systems, Bally Total Fitness, General Motors, Delphi, United Rentals, Terex, Comerica, Delta & Pine Land, Beacon Hill Asset Management, Amaranth Advisors, and Banc of America. Besides serving in the Enforcement Division, Lench was in the SEC’s Division of Corporation Finance from 1999 to 2000.
He reviewed SEC registration statements, proxy materials, and periodic reports involving initial public offerings, secondary offerings, tender offers, mergers and acquisitions, going private transactions, shelf offerings, and proxy contests. Lench was in private practice prior to his arrival at the SEC.
Lench received his B.A. from Brandeis University and his J.D. from Boston University School of Law.
Following Lench’s departure, deputy chief Reid A. Muoio will lead the unit until new leadership is named.