US SEC chairman's former colleague to be named enforcement chief

WASHINGTON, April 18 Thu Apr 18, 2013 6:19pm BST

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WASHINGTON, April 18 (Reuters) - U.S. Securities and Exchange Commission Chairman Mary Jo White will name a trusted lieutenant, Andrew Ceresney, to be her enforcement director in the coming weeks, people familiar with the matter said.

Ceresney has already been spotted around SEC headquarters and is starting to schedule meetings with agency officials, said the people, who were not authorized to speak publicly.

The two have worked together for more than a decade as criminal prosecutors and then in private practice, often handling matters as a team.

Ceresney prosecuted securities fraud cases at the U.S. attorney's office in Manhattan in the late 1990s and early 2000s when White led that office and later followed White to the law firm Debevoise & Plimpton, where they defended Wall Street banks and other top companies and their executives in white-collar investigations.

The pair have been sought after in the defense bar, handling prime assignments for JPMorgan Chase & Co, former Bank of America Corp chief executive Kenneth Lewis and others.

"Mary Jo and Andrew have been on the shortlist for every white-collar assignment that has come up," said Michael Schachter, a lawyer at Willkie Farr & Gallagher who previously worked with Ceresney, speaking of the close working relationship of the two.

While White comes to the SEC with a reputation as an aggressive prosecutor who can shake up the agency, she has faced some concerns about whether she might be barred from participating in many high-profile cases because of her prior defense work.

Ceresney's appointment appears to exacerbate her conflicts, since they will likely share many of the same recusals.

In order to help address those issues, current acting enforcement director George Canellos could stay on as a co-head for a limited time, sources said.

At the SEC, Ceresney will face a wide portfolio of pending investigations and will have to make decisions on where to devote resources. The agency is juggling its final push on cases tied to the financial crisis, with its focus on newer areas of interest, including conduct tied to high-frequency trading.

Ceresney will also have to find a way to appease federal judges, who have grown increasingly critical of the agency's "neither-admit-nor-deny" settlement policy since U.S. District Judge Jed Rakoff in 2011 rejected a proposed $285 million accord with Citigroup on such grounds.

KEEPING UP WITH THE BOSS

Former colleagues said it came as little surprise that White would turn to Ceresney to fill her top enforcement post, since they have worked together for so long and share a similar approach to work.

Ceresney often responds to emails late at night, associates said, much like White.

"I suspect its one of the secrets of his success with Mary Jo - he's the only one who can keep up with her," said Lewis Liman, a partner at the law firm Cleary Gottlieb who worked with Ceresney as the U.S. Attorney's office and on cases in private practice.

Ceresney, like White, is also a long-distance runner, having recently run a half-marathon.

At the U.S. Attorney's office, Ceresney worked on the securities and commodities fraud task force, in the major crimes unit, and as a deputy handling appeals, according to his online biography at Debevoise. While a prosecutor, he handled white-collar cases including stock and bank fraud, accounting fraud, money laundering, among others.

In 2003 he won the conviction of American Banknote's chief executive Morris Weissman, who was accused of fraudulently inflating the company's earnings by recognizing millions of dollars in revenue early and using those figures to raise $115 million through an initial public offering.

In 1999, he prosecuted Andrew Crispo, a prominent New York art dealer, who was convicted of attempted extortion and obstruction of justice after he threatened to kidnap the young daughter of a legal advisor on his bankruptcy case.

Former colleagues and associates described Ceresney with adjectives frequently associated with lawyers that come out of the Southern District of New York - often considered the best prosecuting office in the country.

"Andrew was a tough, well-prepared prosecutor, but he was always a prosecutor of the highest integrity and honesty," said Robert Gottlieb, a lawyer who defended two trials that Ceresney prosecuted involving stock and bank fraud.

Chuck Ross, who defended a money laundering case involving a remitting house in upper Manhattan that Ceresney prosecuted described Ceresney as "incredibly professional," "super smart," and "very well prepared."

"We were adversaries, but it was a personable process to try a case against him," Ross said.

Ross said even though his client was likely to be convicted based on the evidence against him, Ceresney let the defendant, who had showed up to court ever day, remain out on bail over Thanksgiving weekend.

In an office filled with high-achievers, former colleagues said Ceresney still managed to stand out. Liman, the Cleary Gottlieb lawyer, did not work directly on any cases with Ceresney while at the U.S. Attorney's office, but knew him anyway.

"You know people who are stars," Liman added.

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