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SEC Enforcement Division Director to Step Down by Year's End

Stephanie Avakian has served as the head of the division for four years, and oversaw investigations into Wells Fargo's supervision of investment advisors as well as the Share Class Selection Disclosure Initiative.

SEC Enforcement Division Director Stephanie Avakian will be leaving her post and the agency by the end of this year, the commission announced Thursday. She departs after a four-year tenure as both co-director and director of the 1,400-person department. 

Deputy Director Marc Berger will be stepping in as an acting head of the division in the interim. In total, the Division of Enforcement recommended more than 3,000 enforcement actions during Avakian’s tenure, obtaining more than $17 billion in financial remedies and returning about $3.6 billion to investors.


SEC Enforcement Division Director Stephanie Avakian

In a statement about her departure, SEC Chairman Jay Clayton (who has also announced he will step down by year’s end) called Avakian’s leadership skills “unparalleled” and lauded the Enforcement Division’s work under her supervision.

“Her deep knowledge of how the commission works, combined with her personal connections with staff from across the country, have served to empower our investors, accountants, data analysts, trial team members and other professionals to work collaboratively to produce exceptional work,” he said. “With Stephanie leading the team, enforcement also pivoted quickly to address critical emerging issues, acting decisively and deliberately.”

Prior to being named co-director in June 2017, Avakian served as the division’s deputy director beginning in June 2014. Avakian had previously worked in the Enforcement Division at the commission’s New York Regional Office as a branch chief and had also served as counsel for former Commissioner Paul Carey. In between these periods, Avakian was a partner at Wilmer Cutler Pickering Hale and Door, acting as the firm’s vice chair for its securities practice, where she represented financial institutions, companies and individuals before the SEC and other agencies.

During Avakian’s tenure, the division brought numerous cases in the financial services industry, including charges against Wells Fargo for failing to supervise advisors and representatives recommending certain ETF investments to retail clients. As co-director with Steve Peikin, she oversaw the division’s Share Class Selection Disclosure Initiative, in which firms could self-report that they had failed to disclose conflicts arising from placing client assets in higher-fee mutual fund share classes when lower-cost options for similar outcomes were available. The last self-disclosure filings were announced in April, and the initiative netted nearly $140 million for affected investors.

In a speech during a virtual program at the Institute for Law and Economics, University of Pennsylvania Carey Law School on Sept. 17, Avakian detailed what her approach was to her new role when Clayton appointed both her and Peikin as co-directors of the division.

“Steve and I approached the job guided by a single, overarching principle—that vigorous enforcement of the federal securities laws is critical to combat wrongdoing, compensate harmed investors, and maintain confidence in the integrity and fairness of our markets,” she said. “The overall direction of the enforcement program and the everyday decisions on individual cases reflect adherence to that principle throughout our tenure."

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