SEC Enforcement Chief Gurbir Grewal is now resigning this month after his role primarily in the ‘crackdown’ of cryptocurrencies.
Gurbir Grewal, the top enforcement official at the U.S. Securities and Exchange Commission (SEC), is stepping down after playing a key role in cracking down on the cryptocurrency sector and monitoring Wall Street’s use of off-channel communications, per a Bloomberg report.
Since joining the SEC in 2021, Grewal has overseen the agency’s 1,300 enforcement attorneys, leading to numerous cases against various firms and financial professionals.
He was a frequent speaker at industry events, consistently emphasizing the importance of protecting investors.
“Every day, he has focused on how to best safeguard investors and ensure compliance with our established securities laws,” stated SEC Chair Gary Gensler.
“He has led a division that has acted impartially, following the facts and the law wherever they lead.”
Grewal is leaving to pursue a position in private practice, as confirmed by an unnamed source familiar with the situation.
The SEC has had notable confrontations with the finance industry, including hedge funds, brokerages, cryptocurrency firms, as well as retail investor criticism.
Most of the efforts that Grewal helped initiate while at the SEC included legal actions against crypto exchanges for allegedly trading unregistered securities.
The SEC has taken a strong stance on finance firms using unofficial communication methods like WhatsApp.
The agency has expressed concerns about bankers conducting transactions via personal devices, which complicates regulatory oversight.
Grewal, a former federal prosecutor, has overseen investigations resulting in billions of dollars in fines related to these WhatsApp probes.
In one high-profile case, he labeled a Colorado audit firm that evaluated Donald Trump’s social media company as a “sham audit mill,” leading to $14 million in penalties against the firm and its founder.
The audit firm, BF Borgers CPA PC, did not admit to or deny the SEC’s findings.
Following Grewal’s remarks, Trump Media & Technology Group Corp. appointed a new auditor shortly thereafter.
During his time at the SEC, Grewal authorized over 2,400 enforcement actions, resulting in more than $20 billion in disgorgement, prejudgment interest, and civil penalties.
The agency also awarded over $1 billion to whistleblowers during his time.
In 2023, the SEC imposed nearly $5 billion in fines and reimbursements to investors, while its enforcement actions in fiscal 2022 led to a record $6.4 billion in penalties, per Bloomberg.
Grewal, who previously served as the attorney general of New Jersey, will officially leave the SEC on October 11.
Sanjay Wadhwa, the division’s deputy director, will take over as acting director.
Wadhwa has been with the SEC’s enforcement unit since 2003 and was ‘instrumental’ in securing a record $92.8 million penalty against a billionaire hedge fund manager for insider trading in 2011.
David Oliwenstein, a partner at Pillsbury Winthrop Shaw Pittman and former SEC enforcement attorney, noted, “For any market participants thinking Grewal’s departure indicates a softening of enforcement, that would be incorrect.
Sanjay’s approach to enforcement is just as aggressive.”
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Also Read: TD Bank Now Gets Caught With Illegal Market Manipulation
Other Regulation News Today
TD Bank now gets caught with illegal market manipulation and has agreed to pay over $20 million under a deal with the SEC.
Investors are calling it ‘pay to play’.
The U.S. broker-dealer unit of Toronto Dominion Bank (TD Securities USA) has agreed to pay more than $20 million to resolve allegations of manipulating the U.S. Treasuries market.
This settlement comes as part of an agreement with U.S. authorities, concluding a lengthy investigation, per Reuters.
In a court filing on Monday, TD Securities admitted to engaging in spoofing practices within the U.S. Treasuries market as part of a deal with the U.S. Justice Department.
The firm also settled related civil charges with the Securities and Exchange Commission (SEC).
Additionally, the bank faced charges for not properly supervising its former head of the U.S. Treasuries trading desk.
From April 2018 to May 2019, a former employee manipulated the U.S. Treasury cash securities market by placing orders he had no intention of executing, a tactic known as “spoofing.”
This practice aims to create a misleading impression of market demand.
U.S. regulators have taken a strong stance against spoofing, which is designed to distort market activity.
However, the criminal bank has now been let go off what investors deem as ‘easily’.
Under the terms of TD’s agreement, the Justice Department will refrain from prosecuting the firm as long as it adheres to the three-year agreement and implements significant compliance improvements.
The DOJ decided not to appoint a third-party monitor for compliance, based on the company’s efforts to address the issues.
As part of the settlement, TD Securities will pay a $12.5 million criminal penalty related to civil investigations by the SEC and the Financial Industry Regulatory Authority (FINRA).
This amount is in addition to an approximately $9.5 million criminal penalty outlined in the agreement.
The bank will also compensate victims with $4.7 million and forfeit $1.4 million.
This settlement comes at a time when the Canadian bank is reportedly on the verge of pleading guilty to separate charges concerning its U.S. retail bank’s alleged failure to prevent money laundering linked to Chinese crime groups and illegal fentanyl sales, as reported by the Wall Street Journal last week.
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Also Read: TD Bank Customers Now Say They Cannot Access Their
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