(Bloomberg) -- Gurbir Grewal, the US Securities and Exchange Commission’s top enforcement official, is leaving the agency after helping to lead a crackdown on the cryptocurrency industry and Wall Street’s use of off-channel communications.
Since his arrival at the SEC in 2021, Grewal has been in charge of the agency’s 1,300 enforcement attorneys as they brought hundreds of cases against firms and finance professionals. He was a regular speaker at industry conferences, frequently warning lawyers and auditors about their responsibility to protect investors.
“Every day, he has thought about how to best protect investors and help ensure market participants comply with our time-tested securities laws,” SEC Chair Gary Gensler said in a statement. “He has led a division that has acted without fear or favor, following the facts and the law wherever they may lead.”
Grewal is leaving the agency for an attorney position in private practice, according to a person familiar with the matter who asked not to be identified because the plans haven’t yet been made public.
Under Gensler, the SEC has clashed with the finance industry, including hedge funds, brokerages and crypto businesses. The stepped-up enforcement that Grewal helped spearhead included lawsuits against crypto exchanges, alleging they listed unregistered securities.
The SEC took a particularly tough approach on finance firms using unofficial communications tools such as WhatsApp. The agency has long been concerned about bankers using personal phones to make deals, making it harder for regulators to look for wrongdoing. Under Grewal, a former federal prosecutor, the agency has handed down billions of dollars in fines to banks and other Wall Street firms in the so-called WhatsApp probes.
Whistleblowers
In another notable case, Grewal in May called the Colorado firm that vetted the books of Donald Trump’s social media company a “sham audit mill” as the SEC announced $14 million in penalties against the audit firm and its founder. BF Borgers CPA PC and its founder, Benjamin Borgers, didn’t admit to or deny the SEC’s findings.
Trump Media & Technology Group Corp. selected a new auditor days later.
During Grewal’s tenure, the SEC authorized more than 2,400 enforcement actions, leading to more than $20 billion in disgorgement, prejudgment interest and civil penalties. It also awarded more than $1 billion to whistleblowers, the regulator said.
In fiscal 2023, the SEC said it levied almost $5 billion in fines as well as reimbursements to investors. Its enforcement actions in fiscal 2022 resulted in a record $6.4 billion.
Grewal, the former attorney general for the state of New Jersey, will depart on Oct. 11, the SEC said.
Sanjay Wadhwa, the division’s deputy director, will serve as acting director, the SEC said. Wadhwa, who joined the SEC’s enforcement unit in 2003, played a key role in 2011 in securing what was billed as a record $92.8 million penalty against an individual — a billionaire hedge fund manager — on insider-trading allegations.
“For any market participants that believe Director Grewal’s departure signals some sort of softening, that is not going to be correct,” said David Oliwenstein, a partner at Pillsbury Winthrop Shaw Pittman and a former SEC enforcement attorney. “Sanjay’s view of enforcement is at least as aggressive.”
--With assistance from Lydia Beyoud.
(Updates with career move, quotes and case details starting in fourth paragraph.)
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