Kenneth Lench, chief of the U.S. Securities and Exchange Commission enforcement unit that built cases against Goldman Sachs (GS:US) Group Inc. and JPMorgan Chase & Co. (JPM:US), is stepping down after more than 23 years at the agency.
Lench, who led investigations related to subprime-mortgage products that fueled the 2008 credit crisis, will leave the SEC for private industry at the end of this month, the agency said today in a statement. Cases Lench handled yielded about $1.7 billion in recovery for harmed investors, the SEC said.
“Ken’s determination to always seek the right answers and his devotion to protecting investors by working tirelessly with his staff and colleagues made everyone around him better,” George Canellos, co-director of the SEC enforcement unit, said in the statement. “The enforcement division is stronger today because of Ken’s unwavering leadership.”
Lench was tapped to head the structured and new financial products unit in 2010, when it was formed in then-enforcement director Robert Khuzami’s overhaul of the division. The group led the highest-profile cases stemming from the mortgage market collapse that brought down Lehman Brothers Holdings Inc. and forced taxpayer bailouts for the biggest U.S. banks.
Under Lench’s leadership, the group forged a record $550 million settlement with Goldman Sachs over its role in underwriting a collateralized debt obligation known as Abacus. That case came to epitomize the agency’s record on the credit crisis, paving the way for similar settlements with JPMorgan, Citigroup Inc., Credit Suisse Group AG, Mizuho Financial Group Inc. (8411) and RBC Capital Markets.
“It has been a privilege to lead such a talented and dedicated team of professionals committed to uncovering wrongdoing in our securities markets,” Lench said in the SEC’s statement. “I am fortunate to have had the opportunity to work on significant and challenging cases on behalf of our nation’s investors.”
Lench, who graduated from Brandeis University and Boston University School of Law, also led investigations in areas including foreign bribery and accounting fraud during his tenure. From 1999 to 2000, he worked in the SEC’s division of corporation finance, which reviews corporate filings and securities offerings, the SEC said.
Reid Muoio, Lench’s deputy, will lead the structured products unit until a new chief is named, the SEC said.
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