The Securities and Exchange Commission today announced that Julie M. Riewe, Co-Chief of the Enforcement Division’s Asset Management Unit, is planning to leave the agency next month.
As co-head of the unit for the past two-and-a-half years, Ms. Riewe has overseen a staff of nearly 80 attorneys, industry experts, and other professionals responsible for conducting investigations into investment advisers, investment companies, and private funds. Co-Chief Marshall Sprung will continue to lead the unit following Ms. Riewe’s departure.
“Julie is incredibly intelligent, tenacious, and skilled at developing cases,” said Andrew J. Ceresney, Director of the SEC’s Division of Enforcement. “She has helped our asset management enforcement unit to grow in its expertise, spearheaded significant initiatives, and led the unit to having a tremendous impact on the behavior of asset managers and investment advisers.”
Ms. Riewe said, “I have been privileged to work alongside incredibly dedicated and talented colleagues in the nationwide Asset Management Unit and throughout the Division of Enforcement and the SEC. The unit staff’s expertise and their close collaboration with other offices across the SEC have transformed the way the SEC protects investors from fraud and other unlawful industry practices.”
Ms. Riewe was instrumental in overseeing various high-impact, data-driven risk-analytic initiatives within the Asset Management Unit, including the Aberrational Performance Inquiry, which focused on suspicious returns by hedge funds, and the Cherry-Picking Initiative, which targets the unfair allocation of trades and investment opportunities. A hallmark of her tenure as Co-Chief was close collaboration with the SEC’s National Exam Program and Division of Investment Management and with the enforcement and examination staff in the SEC’s regional offices. These collaborations resulted in impactful sweeps and enforcement actions.
During Ms. Riewe’s tenure as Co-Chief, the Asset Management Unit brought enforcement actions that addressed a wide range of misconduct across the asset management industry. Many of these actions were firsts of their kind and included charges against:
- Two J.P. Morgan wealth management subsidiaries who paid $267 million and admitted wrongdoing for failing to disclose conflicts of interest, including preference in discretionary wealth management accounts for proprietary mutual funds and hedge funds and for third-party-managed hedge funds that shared fees.
- Investment management firm F-Squared Investments, which paid $35 million and admitted wrongdoing, for defrauding customers through false performance advertising about its flagship product, and against the firm’s co-founder and former CEO for allegedly making false and misleading statements to investors.
- Three private equity fund advisers within The Blackstone Group, which paid $39 million for failing to properly disclose accelerated monitoring fees as well as discounts on legal fees.
- Blackrock Advisors LLC for failing to disclose a conflict of interest arising from a top-performing portfolio manager’s outside business activity. The firm’s former CCO was also charged in first-ever case for failure to report a material compliance matter to a fund board.
- First Eagle Investment Management and FEF Distributors for improperly using nearly $25 million in mutual fund assets to pay for the marketing and distribution of fund shares.
- Hedge fund adviser AlphaBridge Capital Management and its two owners for fraudulently inflating the prices of securities in the hedge fund portfolios they managed, and against a broker-dealer representative for assisting in the pricing scheme.
Ms. Riewe began her SEC career in 2005 as a staff attorney in the Enforcement Division in Washington D.C. and was promoted to branch chief in 2008. In 2010, she was promoted to be an assistant director in the newly-formed Asset Management Unit, was appointed co-deputy chief of the unit in 2012 and co-chief in 2013. Ms. Riewe received the SEC Chairman’s Award for Excellence in Leadership in 2015 and the Ellen B. Ross Award in 2007. Before joining the SEC, Ms. Riewe was in private practice in Washington D.C.