SEC Enforcement Director Steps Down

By Chris Prentice

NEW YORK (Reuters) – The U.S. Securities and Exchange Commission’s enforcement director is leaving the agency, marking the end of a three-year tenure during which the regulator stepped up scrutiny of Wall Street and cryptocurrency firms.

Gurbir Grewal has led the SEC’s 1,500-person enforcement unit since July 2021, after serving as New Jersey attorney general as well as in other state and federal government roles. During his tenure, SEC enforcement has drawn ire from cryptocurrency and Wall Street firms for its crackdown on core business practices.

The SEC has pursued significant cases in the crypto sector during Grewal’s tenure, including suing exchanges Binance and Coinbase for facilitating illicit offerings to retail investors. It also charged FTX as part of a larger government action against the exchange’s multibillion-dollar fraud and sued the firm’s auditor for negligence.

Under his leadership, SEC enforcement staff embarked on a sweeping multi-year investigative initiative focused on Wall Street’s use of personal devices and apps such as WhatsApp to discuss business, imposing over $2 billion in civil fines against dozens of firms, including JP Morgan Chase, Goldman Sachs, and Morgan Stanley.

This “off-channel” investigative sweep, which began in 2021, is still generating enforcement actions and has also affected hedge funds, private equity funds, and ratings agencies. The initiative drew attention for its breadth and the hefty penalties sought by the SEC, which Grewal described as an effort to deter violations.

“From recalibrating penalties and remedies to confronting emerging risks to holding issuers, insiders, and gatekeepers accountable, I am incredibly proud of all that we’ve accomplished as a Division during my tenure,” Grewal stated.

Under Grewal, the SEC enforcement division has also fought Elon Musk in court over his failure to testify regarding his takeover of Twitter, now known as X, and brought charges against billionaire investor Carl Icahn for disclosure failures.

The enforcement division under Grewal brought more than 2,400 actions that yielded over $20 billion in penalties and other payments, the SEC stated.

Grewal plans to leave the regulator for private practice, according to a source briefed on the matter.

His last day at the SEC will be Oct. 11, and Deputy Director Sanjay Wadhwa will take over as acting director, with Sam Walder, the division’s chief counsel, stepping in as acting deputy director.