Washington D.C., Jan. 12, 2021 —
The Securities and Exchange Commission today announced that Marc P. Berger, Acting Director of the Division of Enforcement, will conclude his tenure at the agency this month. Mr. Berger joined the Commission as Director of the New York Regional Office in December 2017 and was named Deputy Director of the Division of Enforcement in August 2020.
Under Mr. Berger’s leadership, Enforcement staff pursued significant cases across the entire spectrum of the securities industry, with a focus on impactful and timely actions that protected investors and promoted market integrity. Mr. Berger focused on enhancing the efficiency and effectiveness of the Enforcement Division as well as the Division of Examinations programs in New York, better positioning the staff in both Divisions to address emerging threats and pursue misconduct. Mr. Berger prioritized the promotion of diversity and inclusion across the Enforcement Division and New York Regional Office, fostering a culture of teamwork and integrity and implementing changes to help the SEC continue building and maintaining a diverse workforce. He also facilitated investor outreach and encouraged coordination with the SEC’s federal and state partners.
“Marc has been an outstanding leader at the Commission, always bringing integrity and excellent judgment, as well as his experience from his many years as a federal prosecutor, to each of the matters under his leadership,” said Acting Chairman Elad L. Roisman. “Throughout his tenure, Marc maintained an impressive focus on aggressively pursuing bad actors and finding the best outcome for harmed investors and for the greater investing public. Marc is widely respected throughout the Commission not only for his significant efforts to advance the SEC’s mission, but also for his dedication to each of the attorneys, examiners, accountants, analysts, administrative and support staff, and other professionals who he has worked beside each day of his tenure.”
“The Commission staff’s unwavering commitment to protecting investors and maintaining market integrity, and their passion for the work we do, will forever inspire me,” said Mr. Berger. “I am honored to have had the opportunity to work alongside them — in New York and throughout the country — and I am proud of what we have accomplished together.”
Impactful cases to protect investors and preserve market integrity
Under Mr. Berger’s leadership, the Division of Enforcement focused on addressing misconduct involving market integrity and market structure for the protection of investors. Notable actions included an action against Robinhood Financial LLC for misstatements involving the receipt of payment for order flow and violations of the duty to seek best execution, as well as actions against Credit Suisse Securities (USA) LLC in connection with the handling of certain customer orders and against the New York Stock Exchange and two affiliated exchanges for regulatory failures, including the first-ever charged violation of Regulation SCI.
The Division also pursued abusive trading practices under Mr. Berger’s leadership, including an action against J.P. Morgan Securities LLC for engaging in manipulative trading of U.S. Treasury securities, and an action for insider trading involving companies that were going to be added to or removed from a popular stock market index. Mr. Berger oversaw jury trials in the Southern District of New York involving a broker charged with fraud for excessively trading customer accounts and a brokerage firm and two of its executives in connection with misrepresentations and omissions in a private placement offering.
During his tenure, reflecting the focus on investor protections, particularly involving the evaluation of complex products, the Commission brought actions against three investment advisory firms and two dually registered broker-dealer and advisory firms through its Exchange-Traded Products Initiative. The initiative utilized trading data analytics to uncover securities law violations involving unsuitable sales of complex exchange-traded products.
Pursuing violations of the Foreign Corrupt Practices Act
The Division continued to focus on areas that have traditionally been an important part of its enforcement efforts, including actions under Mr. Berger’s leadership for violations of the Foreign Corrupt Practices Act. These included actions against Deutsche Bank AG for violations related to third-party intermediaries, against Herbalife Nutrition Ltd. for payments to Chinese officials in connection with obtaining sales licenses, and against Stryker Corp. for inadequate internal accounting controls related to overseas sales.
Focus on financial fraud and issuer disclosure
The Division also maintained its ongoing focus on identifying and investigating securities laws violations involving the integrity and accuracy of the financial statements of public companies, including violations by individuals. Notable actions include those against Luckin Coffee, General Electric, Hertz and its former CEO, Lumber Liquidators, PPG Industries, Inc. as well as Brixmor Property Group and certain former executives.
Combating unregistered initial coin offerings
The Commission brought significant enforcement actions under Mr. Berger’s leadership involving unregistered initial coin offerings that deprived investors of key long-standing protections important to our public market system. These included an action against Telegram Group Inc., which agreed to return more than $1.2 billion to investors. They also include an ongoing action against Ripple Labs Inc. and two of its executives. Enforcement staff has also pursued issuers for conducting fraudulent ICOs.
Pursuing meaningful relief, combating affinity fraud, and engaging in effective outreach
Enforcement staff under Mr. Berger’s leadership focused on obtaining meaningful relief for investors. Notable recent actions include an action against investment adviser BlueCrest Capital Management Limited, which will result in the return of $170 million to harmed investors, and actions involving asset freezes in connection with a cryptocurrency trading fund and an offering of digital securities.
Mr. Berger also placed particular focus on combating fraud targeting potential victims based on race, ethnicity, religion, gender, age, and other associations. Illustrative examples include actions involving conduct targeting members of the Haitian, Hispanic, and Deaf, Hard of Hearing, and Hearing Loss communities, among others, and Mr. Berger’s participation in an educational video from the Retail Strategy Task Force encouraging investors in the Deaf, Hard of Hearing, and Hearing Loss communities to learn more about how to protect themselves from investment fraud.
Engagement with investors has been an important aspect of Mr. Berger’s tenure at the SEC, including through personal outreach at numerous public community events. Under his leadership, the New York Regional Office hosted a conference with Fordham University on combating community-based financial fraud, featuring speakers from our federal and state partners. It also spearheaded an Investor Outreach Committee which focuses on local outreach to, and education for, teachers, military and veterans, police and firefighters, senior center residents, religious organizations, and community schools and colleges, among other groups.
Meaningful action in response to COVID-19
In response to COVID-19, the Division continued its existing caseload, while also focusing on pursuing potential misconduct that arose as a result of COVID-19 and educating investors alongside our criminal and regulatory counterparts about COVID-related fraud. Under Mr. Berger’s leadership, the Commission issued trading suspensions in the securities of numerous issuers that made claims related to COVID-19. The Division brought fraud charges against Applied BioSciences Corp. for the company’s alleged false claims that it had begun offering finger-prick COVID-19 tests and against Decision Diagnostics Corp. and its CEO alleging false and misleading claims regarding a purported breakthrough technology to detect COVID-19 through a quick blood test.
The Commission also brought an action against The Cheesecake Factory for making misleading disclosures about the impact of the COVID-19 pandemic on its business operations and financial condition – failing to publicly disclose material information that it shared with potential private investors and lenders — which is the first case charging a public company for misleading investors about the financial effects of the pandemic.
Promoting and fostering diversity and inclusion
Mr. Berger brought a personal commitment to diversity and inclusion to each of his roles at the Commission, working with the Office of Minority and Women Inclusion, employee affinity groups, and others to foster efforts to promote diversity and inclusion and to foster collaboration, teamwork, and diversity of thought. In the New York Regional Office, Mr. Berger launched a Diversity Committee to provide a forum to discuss issues related to diversity, to assist with recruitment initiatives, and to promote fellowship among coworkers, including through impactful events in coordination with other affinity groups. Mr. Berger similarly focused on diversity and inclusion across the Division, encouraging meaningful improvements to enhance diversity and inclusion in the workplace.
Making a lasting impact on the Commission through enhancing efficiencies and effectiveness
Mr. Berger assisted the creation and implementation of the Event and Emerging Risk Examination Team in the Division of Examinations. The team proactively engages with financial firms about emerging threats and current market events and provides expertise and resources across the SEC when critical matters arise.
Mr. Berger also brought innovation to the New York Regional Office’s Investment Adviser/Investment Company and Broker-Dealer and Exchange Examinations Programs, enhancing the process for making and evaluating referrals from the Division of Examinations to the Division of Enforcement, improving coordination of examinations of dually registered broker-dealer and advisory firms, and initiating a series of Investment Adviser Compliance Outreach Netcasts to increase information flow to SEC registrants.
Prior to joining the SEC, Mr. Berger was the Global Co-Head of Ropes & Gray LLP’s Securities and Enforcement Practice. From 2002 to 2014, Mr. Berger served as an Assistant United States Attorney in the Southern District of New York. He was Chief of the Office’s Securities and Commodities Fraud Task Force, where he supervised the investigation and prosecution of many of the nation’s highest profile financial and investment fraud cases, including the largest crackdown on hedge fund insider trading in U.S. history. Mr. Berger received his bachelor’s degree with distinction from Cornell University and earned his law degree from the University of Virginia School of Law. He served as a law clerk to the Honorable Richard M. Berman, U.S. District Judge, Southern District of New York.