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Law360 (August 5, 2020, 8:21 PM EDT )
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| Steven Peikin |
Peikin's three years of service, alongside co-director Stephanie Avakian, included establishing the agency's Cyber Unit early on in his tenure, an overarching focus on retail investor protections, and more recently the steering of a special committee to thwart coronavirus-related fraud.
"I am particularly proud of the manner in which the women and men of the Division of Enforcement responded to serious challenges that it has faced over the last three years," Peikin said in an email to Law360, noting that he hasn't yet made plans for his next job.
Peikin joined the SEC in June 2017 from Sullivan & Cromwell LLP, where as managing partner of the criminal defense and investigations group he represented clients including Goldman Sachs, Barclays and BP.
That year, Peikin and Avakian established the division's Cyber Unit to combat a wave of fraud and misconduct involving so-called initial coin offerings — essentially the cryptocurrency industry's equivalent of the IPO — which he noted were then "an entirely new asset class that posed serious risks to investors."
Peikin told Law360 that additional challenges the agency has faced have included COVID-19, the hiring freeze the commission instituted between October 2016 to April 2019, and U.S. Supreme Court cases that limited the SEC's enforcement power, including a 2017 decision that put a five-year statute of limitations on the SEC's ability to collect disgorgement.
In March, Peikin and Avakian created the Coronavirus Steering Committee in response to COVID-19-related misconduct, leading to the trading suspensions of dozens of issuers making allegedly false claims along with five fraud charges, the commission noted in a statement regarding Peikin's departure.
"The efforts of the women and men in the division to promptly address COVID-19-related misconduct demonstrate the flexibility, expertise and commitment to our mission that Steve and Stephanie's leadership has fostered across the SEC," said SEC Chairman Jay Clayton in the statement.
Peikin and Avakian's original stated goals included a focus on holding individuals accountable, such as corporate executives, which took center stage in high-profile settlements with now-defunct health tech company Theranos and electric car maker Tesla.
But the division's top priority during their control has been the protection of Main Street investors, the SEC noted in its statement.
Under the duo's leadership, thousands of enforcement actions resulted in more than $13.5 billion in disgorgement and penalties, as well as the return more than $3.1 billion to harmed investors, according to SEC figures.
Among other notable initiatives, in April the SEC announced that the voluntary Share Class Selection Disclosure Initiative, a two-year program that incentivized advisers to report fee disclosure lapses amid a broader focus on disclosure issues, had returned $139 million to investors.
"Their investor-first efforts have resulted in thousands of actions that have righted wrongs and, more importantly, both returned illicit gains to harmed investors and eliminated improper fees, providing lasting savings for years to come," added Clayton, a fellow Sullivan & Cromwell alumnus who hired Peikin for the co-director role.
Before Sullivan & Cromwell, Peikin served as an assistant U.S. attorney in the Southern District of New York from 1996 to 2004, most recently as head of its Securities and Commodities Fraud Task Force.
Avakian, who will remain as the division's director, called Peikin a "strong, unwavering leader for the division."
"By using his considerable expertise and impeccable judgment for the public good, he has been an example for all of us," she said in a statement. "He has been a terrific partner, and I will miss him."
--Editing by Adam LoBelia.
For a reprint of this article, please contact reprints@law360.com.
