The SEC tapped one of its own Monday to lead the agency's enforcement division tasked with conducting investigations into complex financial instruments.
The new enforcement chief, Michael Osnato, served as an assistant director in the agency's New York Regional Office since 2010 and helped spearhead many of the agency's enforcement actions. He replaces Kenneth Lench, who led the unit after its inception in 2010 before stepping down this past summer.
Osnato, who first joined the SEC in 2008, initiated the agency's case against JPMorgan Chase and two former traders for fraudulently overvaluing a complex trading portfolio in order to hide massive losses, which led to the banking giant admitting it violated federal securities laws. He also brought charges against four former investment bankers and traders at Credit Suisse Group in a scheme that was designed to overstate the prices of $3 billion in subprime bonds and actions related to operators of the Reserve Primary Fund.
Michael is a natural leader who brings keen investigative instincts and exceptional judgment to his work, Andrew J. Ceresney, co-director of the SECs Division of Enforcement, said in a statement. He has been a valuable part of our efforts to punish misconduct related to complex financial instruments and we are pleased that he will bring his considerable talents and skills to the unit.
Osnato's new role will involve leading the SEC's Complex Financial Instruments Unit that is comprised of attorneys and industry experts working in SEC offices across the country to investigate potential misconduct related to asset-backed securities, derivatives and other complex financial products. The unit was created along with four other specialized enforcement units in 2010 and was formerly known as the Structured and New Products Unit.
I am honored and gratified to have this opportunity to lead the Complex Financial Instruments Unit, said Osnato in a statement. The unit has targeted fraud in some of the most challenging areas of the markets and I look forward to working with the many talented professionals in the unit to keep the Enforcement Division on the cutting edge of todays financial markets.
Prior to joining the SEC enforcement staff, Osnato worked at Shearman & Sterling and later at Linklaters in New York. He earned his bachelors degree from Williams College and his law degree from Fordham Law School.