* SEC's Riewe, Sprung to be seconds in command of unit
* Changes come after SEC's Rob Kaplan departed for law firm
* Karpati still remains head of asset management group
* Unit works on investigations into mutual funds, hedge
By Sarah N. Lynch
June 5 Two enforcement attorneys at the U.S.
Securities and Exchange Commission have been promoted to serve
as the new deputy chiefs of the agency's specialized asset
The appointment of pair, Julie Riewe and Marshall Sprung,
reflects a change in leadership structure following the
departure last week of Robert Kaplan, who served as the co-chief
of the unit with Bruce Karpati. Kaplan went to work for the law
firm Debevoise & Plimpton LLP.
Karpati, who announced the appointments, will oversee the
whole u nit, which investigates cases against mutual funds and
The asset management unit is one of five specialized groups
created in 2010 as part of a major structural makeover of the
SEC's enforcement division following the SEC's failure to detect
Bernard Madoff's Ponzi scheme.
It has been developing initiatives that are used to help get
out ahead of high-risk areas for hedge funds, private equity
funds and mutual funds.
Among the focal areas for the unit have been aberrational
performance of hedge funds, the valuation of illiquid
portfolios, false performance claims and preferential
Sprung has worked in Los Angeles for the SEC since 2003,
while Riewe has been with the agency since 2005, working in
Prior to working at the SEC, Sprung was a litigation
associate in Gibson, Dunn & Crutcher's Los Angeles office. Among
the cases he has worked on at the SEC include AXA Rosenberg, the
SEC's first case against a quantitative investment manager for
allegedly concealing a major computer glitch that cost investors
millions of dollars.
Riewe previously worked as a litigation associate in the
Washington, D.C. office of Wilmer Cutler Pickering Hale and
Recently, she helped work on a case against an investment
adviser who allegedly used LinkedIn and other social media
networking websites to lure investors by offering to sell more
than $500 billion in fake securities.
She also has significant experience on insider-trading
probes, and w orked o n the SEC's case against Dallas Mavericks
owner Mark Cuban.
"Julie and Marshall have been with the unit since day one
and have been a key part of its success," said Karpati.