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SEC Names Osnato to Head Complex Products Unit

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The Securities and Exchange Commission said Monday that it appointed Michael J. Osnato, Jr., to lead the Enforcement Division’s Complex and Financial Instruments Unit, formerly known as the Structured and New Products Unit.

Osnato, who joined the SEC staff in 2008 and has served as an assistant director in the New York Regional Office since 2010, will be chief of the Enforcement Division unit, which is comprised of attorneys and industry experts working in SEC offices across the country that investigate potential misconduct related to asset-backed securities, derivatives and other complex financial products.

The SEC said that Osnato has played a key role in a number of significant SEC enforcement actions, namely helping to spearhead the SEC’s case against JPMorgan Chase & Co. and two former traders for fraudulently overvaluing a complex trading portfolio in order to hide massive losses, and the subsequent action in which the bank admitted that it violated federal securities laws.

The unit was created along with four other specialized enforcement units in 2010. Andrew Ceresney, who just became the sole director of the SEC’s Enforcement Division, said last October that the division would retain the five specialized units that were created by his predecessor, Robert Khuzami. The specialized units were “a wonderful innovation that has worked extremely well,” Ceresney said.

While the division will retain the units — which include asset management, market abuse, foreign corrupt practices, municipal securities and public pensions, and structured products — Ceresney said that the units would  likely be “retooled.”

In a statement announcing Osnato’s appointment, Ceresney said that Osnato “is a natural leader who brings keen investigative instincts and exceptional judgment to his work.” Osnato “has been a valuable part of our efforts to punish misconduct related to complex financial instruments, and we are pleased that he will bring his considerable talents and skills to the unit.”

Osnato said in the same statement that the Complex and Financial Instruments Unit “has targeted fraud in some of the most challenging areas of the markets, and I look forward to working with the many talented professionals in the unit to keep the Enforcement Division on the cutting edge of today’s financial markets.”