July 29, 2015 / 6:56 PM / 4 years ago

U.S. SEC's Hawke, head of market abuse unit, to depart agency

WASHINGTON, July 29 (Reuters) - Daniel Hawke, a 16-year veteran at the Securities and Exchange Commission who helped lead major high-profile enforcement cases against stock exchanges and brokerages, is planning to leave the agency in August, the SEC announced on Wednesday.

Hawke, who heads the SEC enforcement division’s market abuse unit, is a well-known figure among defense attorneys and on Wall Street, where for the last few years he has presided over a crackdown on violations of equity market structure rules and pursued new methods for detecting insider trading.

The SEC did not say where Hawke, 52, is headed, but a person familiar with the matter told Reuters he will be working in Washington, D.C., for the Arnold & Porter law firm.

“Dan is known for his strategic vision and built the Market Abuse Unit into a trailblazer in the investigation of market structure violations and complex insider trading schemes,” Andrew Ceresney, the SEC’s enforcement director, said in a press release.

Under Hawke’s leadership, the SEC imposed the first-ever financial penalty on a stock exchange when it filed charges against the New York Stock Exchange for compliance failures that the SEC said gave some customers “an improper head start” on trading information.

The push by the market abuse team to crack down on equity market structure rule violations came in the wake of the May 2010 “flash crash,” an event in which the Dow Jones industrial average plunged 700 points before sharply rebounding.

The incident sparked broader questions about how the markets have evolved and whether rapid-fire trading, order routing decisions and dark pool trading platforms could be letting some investors get unfair advantages over others.

During his tenure, the market abuse unit has filed cases against most of the major exchanges, including Nasdaq, Direct Edge, now owned by BATS Global Markets, and the Chicago Board Options Exchange, as well as dark pools, including one operated by UBS.

In addition, Hawke also helped to oversee the use of new quantitative methods for detecting insider trading.

Among the cases he directed was one filed against a chemist at the Food and Drug Administration for insider trading based on drug approvals that were not yet public.

Hawke started his career at the SEC in 1999. In addition to heading the market abuse unit since its 2010 inception, he also previously served as the head of the SEC’s Philadelphia office.

Reporting by Sarah N. Lynch; Editing by Dan Grebler

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