More On Legal & Compliancefrom The Advisor's Professional Library
- Preventing and Dealing with Client Complaints Although the SEC has not provided specific guidance on how client complaints should be handled, a firms policies and procedures should provide clear direction how to do so, as neglecting complaints can exacerbate a bad situation.
- Agency and Principal Transactions In passing Section 206(3) of the Investment Advisers Act, Congress recognized that principal and agency transactions can be harmful to clients. Such transactions create the opportunity for RIAs to engage in self-dealing.
The Securities and Exchange Commission announced Tuesday that Kenneth Lench, chief of the Enforcement Division’s Structured and New Products Unit, will leave the agency for the private sector at the end of July.
Lench, who’s been at the SEC for more than 23 years, has led the unit since its inception in January 2010. The unit conducts investigations into complex financial instruments including asset-backed and derivative securities, and has 45 staffers in eight SEC offices across the country.
“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,” said George Canellos, co-director of the SEC’s Division of Enforcement, in a statement. “The Enforcement Division is stronger today because of Ken’s unwavering leadership.”
During Lench’s tenure, the SEC says that the unit filed “significant enforcement actions” against financial services firms that violated federal securities laws during the financial crisis relating to the structuring, marketing, and sale of collateralized debt obligations (CDO) and residential mortgage-backed securities (RMBS).
The CDO and RMBS cases filed under Lench’s leadership include Goldman Sachs, JPMorgan (CDO case and RMBS case), Citigroup, Credit Suisse, Mizuho, Wells Fargo/Wachovia, Option One, Stifel, Nicolaus & Co., and RBC Capital Markets. These cases provide for approximately $1.7 billion in financial recovery for harmed investors.
Lench joined the SEC’s Enforcement Division as a staff attorney in 1990. He was promoted to branch chief in 1995, assistant chief counsel in 2000, and assistant director in 2004. As an assistant director, Lench spearheaded the SEC’s major auction-rate securities settlements with a number of major broker-dealer firms that provided more than $60 billion in liquidity to tens of thousands of investors.
He also led significant investigations into matters involving financial and accounting fraud, Foreign Corrupt Practices Act violations, and hedge fund fraud cases.
Besides serving in the Enforcement Division, Lench was in the SEC’s Division of Corporation Finance from 1999 to 2000.
Lench, who was in private practice prior to his arrival at the SEC, received his B.A. from Brandeis University and his J.D. from Boston University School of Law.
Check out How the SEC Stacks the Deck on ThinkAdvisor.