SEC tempts top promoter who says harsher punishment is coming

Gurbir Grewal became director of the SEC̵

7;s enforcement program after serving for more than three years as New Jersey’s attorney general, during which he transformed police use-of-force training and disciplinary transparency to combat Asian-American hate crimes. Spoken against, and taken personal. Heat for how state officials dealt with the coronavirus pandemic.

Since taking over at Wall Street Watchdog, Mr Grewal has indicated that higher fines for wrongdoing are on the horizon, as well as efforts to remove more male factors from Wall Street jobs. “We cannot arrest them,” Mr Grewal said in an interview. “We can kick them out of the industry.”

Mr. Grewal’s long career in government, where he practiced partisan politics and managed a large number of law-enforcement agencies and personnel, is rare for an SEC enforcement chief. The agency’s lead promoter, one of its highest-profile figures, is usually a former prosecutor who rose to the top ranks of the Defense Bar, where he fought with the SEC and the Justice Department on behalf of corporate clients.

Mr Grewal, 48, was a federal prosecutor in New Jersey and New York before he was tapped by two governors – a Republican and a Democrat – to oversee law-enforcement agencies in his home state of New Jersey. Those posts raised his profile and made him one of the most prominent Sikh Americans in the country.

“I don’t think he’s ever tried to be a politician, but he succeeds the way a politician would,” said former prosecutor and Mr Grewal’s aide, Jude Vale. , “He treats people with respect and takes care not to rush into talks because people are not serving his immediate interest.”

Mr. Grewal was born in Jersey City and grew up in the northern suburbs of the state. Diplomacy was his first career choice after graduating from Georgetown University, he said, but a federal recruitment freeze in the mid-1990s blocked that path. They found their calling after September 11, 2001, when hundreds of Sikh Americans were victims of racial profiling and violent attacks by people who said they were avenging terrorist attacks. (Sikh men in practice wear turbans and beards. Their belief, based on the worship of one God and belief in social justice and equality, is the fifth largest independent world religion.)

Then Mr. Grewal, a young lawyer in private practice, said he absorbed the racist taunts directed at him as he walked around downtown Washington a few days after 9/11. At his law firm, he kept out of client meetings before finding a mentor who helped him move forward. He decided to become a federal prosecutor, believing he could change people’s misconceptions and prejudices as a member of law enforcement.

Adam Ebensohn, a friend of their shared time in the Brooklyn US Attorney’s office, said Mr Grewal was a smart and resourceful young prosecutor whose ability to connect with people and earn their trust set him apart.

“He said something that stuck with me: that he took great pride in standing before the jury and saying that he represented the United States, and that some might be surprised to see someone like him. Looks can represent America and represent the best of us,” Mr. Ebensohn said.

Later, as a federal prosecutor in Newark, NJ, Mr. Grewal headed the economic-crime unit, which was involved in overseeing the prosecution of traders who illegally sold market-run corporate news stolen by hackers. Received. He also won a case against convicted Ponzi schemer Eliahu Weinstein, whose 24-year sentence was commuted by then-President Donald Trump in January. Mr Grewal wrote on Twitter at the time that he was “disgusted” by Mr Trump’s move, saying it was “one nonsense reducing the punishment of another.”

In 2018, Mr Grewal became the country’s first Sikh state attorney general when Democratic Governor Phil Murphy promoted him from Bergen County Prosecutor, a role for which he was nominated by former Republican Gov. As attorney general, he implemented new policies of the use of force for New Jersey’s 37,000 police officers and intervened in the case of preserving deportation protections for immigrants enrolled in the Deferred Action for Childhood Arrivals program, which a federal judge found. invalidated in July.

He also oversaw state securities regulators but did not act directly on their affairs. Just after Mr Grewal left the state government to work for the SEC, New Jersey became the first state to order BlockFi Inc., a well-known cryptocurrency company, to stop offering unregulated interest-bearing accounts for crypto deposits. The state said BlockFi failed to treat the product as a security, which would require registration with the state.

BlockFi has stated that the accounts are legal and allowed in New Jersey, while the company discusses the matter with the state.

Working in New Jersey’s political system was tough, Mr. Grewal said, and he was contemplating his future when a top adviser to SEC Chairman Gary Gensler approached him in May. The agency needed a new enforcement director after Gensler’s first choice for the job resigned after a judge questioned his conduct in a lawsuit involving Exxon Mobil Corp.

Grewal’s appointment was supported by several progressive economic-policy groups, who criticized Gensler as his first choice for director, as his experience had mostly involved representing businesses in legal battles. Other experts say Mr. Grewal’s lack of experience in the private sector may make him prone to punish willful misconduct when it actually stems from mistakes or negligence.

Andrew Vollmer, a former SEC deputy general counsel affiliated with the Mercatus Center at George Mason University, said, “That’s where you see pro-regulatory and pro-prosecutorial attitudes very broadly, and that’s the market potential.” affects.” The biggest concern about Grewal is that he has the mindset of a prosecutor.”

Since joining the SEC, Mr. Grewal has given several speeches speaking diligently about the future of enforcement, including whether firms or individuals are repeating bad acts regularly punished by the SEC. So the penalty may have to be increased.

Speaking to the New York City Bar Association last month, Mr. Grewal said that some Americans have become cynical about negotiations between business and government agencies, partly because of “the perception that we, the regulators, have to deal with them appropriately.” Failing to hold accountable, or worse still, some people’s belief that there are two sets of rules.”

He said tighter restrictions could help counter that approach. The SEC will seek to admit some defendants to wrongdoing when they commit, a tactic the agency tried during the Obama administration but rarely used because admissions could hurt companies in related private litigation. (SEC defendants typically settle cases without admitting or denying the agency’s claims.)

Mr Grewal said he would not be a spokesperson for the larger social and political issues that he faced as Attorney General. But “as a visible minority,” he can still influence the practice involving American corporations and large law firms.

“Maybe when you see people like me in this situation, a law firm is more attentive to diversity issues and that’s okay,” he said. “Because when I was there, I felt like it wasn’t okay to look like me.”

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