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SEC names Julie M Riewe and Marshall S Sprung as co-chiefs of asset management unit

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The Securities and Exchange Commission (SEC) has named Julie M Riewe and Marshall S Sprung as co-chiefs of the division of enforcement’s asset management unit, a national specialised unit that focuses on misconduct by investment advisers, investment companies, and private funds.

 
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.
 
Riewe (pictured) 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. 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.
 
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 USD1bn hedge fund advisory firm for scheming to overvalue assets under management, against gatekeepers 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.
 
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 programme,” says 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.”

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