On my departure as Director, I would like to publicly recognize the staff of the Enforcement Division - both current and former - for their tremendous contributions on behalf of investors. In that regard, below is a letter I sent to the staff last week.[1] 

Dear All,

It is difficult to leave this job without the opportunity to speak in person to those who made it so special. Given the circumstances, and my desire to connect with as many of you as possible, I am sharing some thoughts with you here. And, in order to also connect with our former colleagues who contributed to the Division’s successes but are no longer at the Commission – as well as to share your many accomplishments more broadly – I plan to post this on the SEC website in the coming days.

It has been four years – almost to the day – since I became Acting Director of this Division. As I have already said before to many of you, this has been the job of a lifetime. That is because of you.

Over the past four years, we ran an aggressive enforcement program without fear or favor. We zealously pursued wrongdoers, protected retail investors, and preserved the integrity of our markets. We investigated and recommended cases the Commission brought against some of the world’s largest and most recognized companies, financial institutions, and asset managers, as well as current and former C-suite executives, politicians, and celebrities. And at the same time, we stopped Ponzi and other schemes – large and small – orchestrated against ordinary investors by individuals who are unknown to most of the world. We defied the false narrative that we face a binary choice between protecting Main Street and policing Wall Street. I could not possibly capture all of your accomplishments in this note, though I have tried to summarize them in a separate document, attached here.

This job is so much more than the individual cases. But, of course, I take great pride in the cases. Every case is important though some stand out. A few are the SEC’s actions against: Tesla and Elon Musk; Theranos and Elizabeth Holmes; General Electric; Facebook; Telegram and Kik; the EDGAR hackers; Wells Fargo; Robinhood; former Congressman Christopher Collins; Goldman Sachs; Lek Securities and Avalon Trading; and the Woodbridge Group and its founder Robert Shapiro.

Why do I note these cases? Because in my view, they are just a few examples of cases that reflect the strength of our program and impacted the market beyond the four corners of the particular matter – whether because of the brazenness or novelty of the misconduct, the immediate impact on investors, the deterrent effect of the charges or remedies, the identity of the party or parties the Commission charged, the complexity and sophistication of our investigative work, or the message sent to the market as a whole about the strength of the SEC’s enforcement program. Cases like these put a fine point on our sophistication, independence, persistence, agility, and trial skills. These cases reinforce the message that we are here. We are watching. We will put together the pieces. We are ready to move, and we can move quickly. Market integrity matters. Accurate disclosure matters. A level playing field matters. Treating investors and customers honestly matters. These cases remind people of those things.

I also take great pride in how we responded to the many challenges we faced over the past years. We met the programmatic challenges presented by the Supreme Court’s decisions in Lucia, Kokesh, and Liu directly and thoughtfully by pulling together and acting consistently as a Division. We met other challenges by being focused, strategic, and innovative. Our staff levels dropped by more than 150 from the end of fiscal 2016 because of a two-plus-year hiring freeze and, even after receiving additional funding, we still finished fiscal 2020 with more than 100 fewer staff than we had at our high-water mark. We also lost 35 days to a government shutdown, and a global pandemic has had us working from home for nine months and counting. These things could have hurt us and, as a result, hurt investors. Instead, we did what we always have done: investigate, recommend, and litigate important, innovative cases to obtain significant remedies on behalf of investors. That we did this in the face of such challenges has been extraordinary.

Of course, it was you who actually did those things, and it is you to whom I owe so much thanks. We were able to accomplish all of this because of our collective strength. Though we are more than 1400 people spread out across the country, we work together. The theme of the first Chief Enforcement Conference Steve and I held was “One Division, One Mission.” Today it is truer than ever.

An organization is its people, and you are what makes this Division strong, aggressive, and nimble. From my perspective, the cohesiveness of this Division has never been greater. And never has that been more apparent to me than in the midst of the global pandemic. We were all besieged by worries about the unknown and by life challenges for which many of us were unprepared – like becoming full-time caregivers and teachers. Through it all, you kept at it. And it was a team effort – we worked together to solve every sort of problem. How to manage and lead through the pandemic was not obvious to me. Your support for each other, and for me, made all the difference. I tried to just be myself, confront the fears and uncertainty we all share head on, and keep the ship moving forward. Continuing to pursue our shared mission kept me focused and I suspect it did for many of you as well.

I have seen a lot at the SEC. As most of you know, my career began here. In 1995, I joined what was then the Northeast Regional Office (now NYRO) as a staff attorney in Enforcement. From there I spent a year at Headquarters as counsel to then-Commissioner Paul Carey. When I rejoined the Division in 2014 as Deputy Director, I brought with me my history and experience at the agency. I also brought a true appreciation for the challenges you face, and the mission that drives you. Since I returned, I’ve seen a lot of change. By my count, the makeup of the Commission has changed 11 times, including for three and half months when there were only two Commissioners. Now, with this transition, you face more change.

In all my years in the Division, and at the Commission, and in private practice, what does not change is the steady and determined approach of the Enforcement Division. Every time there is a transition it seems we hear about shifting sands and predictions of a change in enforcement focus. I’ve come to learn that is all noise. Inside the Division, we keep our focus and hew to our mission. No matter the external narrative, we continue on our path, pursue our investigations, and continue to make strong recommendations designed to protect investors. Although I know you don’t need any prodding, I trust you will continue to do the same. Do not get wrapped up in worrying about change. Keep investigating those cases you believe merit investigation, keep making the best recommendation you can in each case, and continue to stand behind your work.

I know that Marc will lead you effectively through this transition. So, as sad as I am to leave, I am glad that you will be in such capable hands, and I am grateful that he has agreed to stay on.

With that, I will close with my sincere thanks. I am grateful to Chairman Clayton for giving me – and all of us – this opportunity. Jay gave us his complete support, set us up for success from day one of his tenure, gave us the freedom to run a vibrant enforcement program, and backed us unwaveringly, including when we needed it most.

I am also grateful for my partnership with Steve Peikin, who was a strong leader, a tireless advocate for the Division, and a great partner. Steve made this job a lot of fun and I’ve missed him. And, I am of course grateful for the thoughtful counsel and friendship of Joe Brenner. I am incredibly fortunate to have had the benefit of Joe’s advice and guidance every day for the past six and a half years.

Finally, I am grateful to have been blessed with such wonderful colleagues. I owe a great debt to each of you – for the job you do and for the community you’ve created. You made this job rewarding in a million ways and I cannot thank you enough. I will miss being part of this special place.

You have my genuine appreciation, respect, and affection.

Best,
Steph