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Bruce Karpati, Chief of Enforcement Division Asset Management Unit, to Leave SEC After 12 Years


Washington, D.C., May 9, 2013 —

The Securities and Exchange Commission today announced that Bruce Karpati, chief of the Enforcement Division’s Asset Management Unit, will be leaving the agency for the private sector after more than a dozen years of federal service.

Mr. Karpati has served at the helm of the Asset Management Unit since its inception in January 2010, overseeing a staff of more than 75 attorneys, industry experts, and other professionals responsible for conducting investigations into investment advisers, investment companies, and private funds.

Mr. Karpati and several colleagues from the Asset Management Unit and other offices received the SEC Chairman’s Award for Excellence in 2012 for their work on the Aberrational Performance Inquiry, which proactively uses performance data to uncover various types of investment fraud by hedge fund managers.

“Beyond all the significant enforcement actions, Bruce has been a pioneer in the use of complex data analysis to detect securities fraud and a pivotal figure in the formation of specialty units within the Enforcement Division,” said George S. Canellos, Co-Director of the SEC’s Division of Enforcement. “His vision and dedication have tremendously benefited the Asset Management Unit and enforcement staff around the country.”

Mr. Karpati said, “I have been privileged to work with such talented and dedicated staff in the Enforcement Division and across the SEC. I am particularly proud of the accomplishments of my colleagues in the Asset Management Unit, who have worked collaboratively on a nationwide basis to bring expertise to bear and proactively combat fraud in the asset management industry.”

During Mr. Karpati’s tenure as chief of the unit, he has overseen investigations of investment advisers for various forms of misconduct involving valuation, performance, conflicts of interest, insider trading, manipulation, derivatives, fund governance, the 15(c) process, disclosure, and compliance and controls.

Mr. Karpati has spearheaded several risk-based initiatives to ferret out misconduct by investment advisers, including the Aberrational Performance Inquiry, Fund Fee Initiative, Revenue Sharing Initiative, and Compliance Program Initiative that specifically focuses on registered investment advisers who repeatedly fail to adopt or implement effective compliance programs.

Among the unit’s enforcement actions brought under Mr. Karpati’s leadership:

Mr. Karpati was instrumental in establishing the Asset Management Unit, formulating its strategic and operating plans, setting unit priorities, hiring industry experts, and building the unit’s infrastructure. A hallmark of Mr. Karpati’s tenure was very close coordination with other SEC divisions and offices such as the National Exam Program, the Division of Investment Management, and the Division of Risk, Strategy and Financial Innovation. These collaborations resulted in examination sweeps, rulemakings, and more effective detection of emerging risks.

Mr. Karpati, 43, joined the SEC’s New York Regional Office as an enforcement staff attorney in 2000. He was promoted to branch chief in 2002 and assistant regional director in 2005. In 2007, he founded the SEC’s Hedge Fund Working Group, a cross-office initiative to combat securities fraud in the hedge fund space. Prior to his arrival at the SEC, Mr. Karpati spent four years in private practice at a large national law firm.

Mr. Karpati graduated from Tufts University and the University at Buffalo Law School.

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Following Mr. Karpati’s departure at the end of this week, deputy chiefs Julie Riewe and Marshall Sprung will lead the unit unit until new leadership is named.


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