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WASHINGTON, June 21 (Reuters) - The chief of enforcement for municipal securities and public pensions at the U.S. Securities and Exchange Commission, Elaine Greenberg, will step down in July to begin working in the private sector, the SEC said on Friday.
Greenberg was the first head of the enforcement unit, which was created in January 2010, and led it through many major investigations and precedent-setting cases. The unit was unusual because of its dual mandate to police both municipal securities and the retirement systems for state and local employees. Greenberg also has run the Philadelphia regional office's enforcement program since December 2006 and worked at the regulator for 25 years total.
The SEC has not named a replacement.
"Elaine Greenberg has had an important and deep influence on the municipal market. She pulled together a very strong cadre of lawyers and we expect that they will ably continue the work that she began," said Scott Lilienthal, president of the National Association of Bond Lawyers.
Within months of becoming chief of the unit, Greenberg turned up the heat on the $3.7 trillion municipal bond market. In the summer of 2010, the SEC charged New Jersey with securities fraud for allegedly failing to disclose its public pension shortfall, the first enforcement action against a state.
Since then, it has also charged Illinois in a similar case, as well as former Detroit mayor Kwame Kilpatrick in a "pay-to-play" scheme involving pension money.
Greenberg also took on one of the biggest scandals in the market in the last decade - alleged bid-rigging for derivatives that municipalities bought using bond proceeds. Cities would "park" money from bond sales in guaranteed investment contracts sold by banks and insurance companies until they needed the funds.
From December 2010 to December 2011, the SEC charged five major financial institutions, including Bank of America, as part of a complicated scheme of allegedly paying off bidding agents to win business. As part of the settlement, the five firms returned more than $700 million to the affected municipalities.
Most recently, Greenberg led the groundbreaking charges against Pennsylvania's capital city of Harrisburg for allegedly committing fraud by making misleading statements in speeches and presentations.
"Elaine's leadership of the unit and her efforts on behalf of investors have been groundbreaking and have had a tremendous impact on the behavior of participants in the municipal securities and public pensions markets," said SEC Commissioner Elisse Walter, in a statement.
Greenberg was not available for comment, but in a statement released by the SEC she said she was "fortunate to have served alongside such talented and dedicated colleagues over these many years and am proud and appreciative of our collective achievements on behalf of the nation's investors and the securities markets."
The commission has made major personnel changes since Mary Jo White became chair of the regulator in April. Recently, White appointed Andrew Ceresney and George Canellos as co-directors of the Enforcement Division, as well as Anne Hall to be the new general counsel.