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Michael J. Osnato Jr., Chief of Enforcement Division’s Complex Financial Instruments Unit, to Leave SEC


Washington D.C., Jan. 12, 2017 —

The Securities and Exchange Commission today announced that Michael J. Osnato Jr., Chief of the Enforcement Division’s Complex Financial Instruments Unit, is planning to leave the agency later this month.

For the past three years, Mr. Osnato led the specialized unit of 45 attorneys and industry experts in offices across the country that investigate potential misconduct related to complex financial products and practices involving sophisticated market participants.  In addition, Mr. Osnato has played a leading role in SEC programs, including the Enforcement Division’s national Cooperation Committee.

“Mike has been an insightful and innovative leader of the Enforcement Division’s unit dedicated to policing complex financial instruments and practices,” said Stephanie Avakian, Acting Director of the SEC’s Enforcement Division.  “As the financial crisis ebbed, Mike proactively refocused the unit toward instruments and practices that disadvantaged retail investors, and put a premium on smart and efficient investigative techniques.  The investing public is safer because of these efforts.”

Mr. Osnato said, “It has been a singular honor to serve alongside the talented staff of the Enforcement Division whose professionalism and commitment to fairness knows no equal.  I am particularly proud of my colleagues in the Complex Financial Instruments Unit, who have helped pave the way for the Division’s use of novel and streamlined investigative techniques and data analytics to root out the most sophisticated forms of misconduct in today’s markets.”

Under Mr. Osnato’s supervision, the SEC has brought enforcement actions that addressed a wide range of sophisticated misconduct:

  • The SEC’s first three sets of charges involving issuers of structured notes, a complex financial product that typically consists of a debt security with a derivative tied to the performance of other securities, commodities, currencies, or proprietary indices, against UBS AG, Merrill Lynch, and UBS Financial Services.
  • The SEC’s actions against a Big Three credit rating agency against Standard & Poor’s for post-financial crisis misconduct arising from the rating of complex debt instruments.
  • The SEC’s fraud charges against a high-frequency trading firm that used algorithmically-generated rapid-fire trades to manipulate the closing prices of thousands of NASDAQ-listed stocks.
  • Charges against Merrill Lynch for violating the SEC’s Customer Protection Rule through usage of complex options trades that placed customer funds at risk, the settlement of which involved admissions of wrongdoing and hundreds of millions of dollars in monetary sanctions.  
  • Charges against three Morgan Stanley entities for misleading investors in a pair of residential mortgage-backed securities (RMBS) securitizations that the firms underwrote, sponsored, and issued.
  • The SEC’s charges against four veteran investment bankers at Credit Suisse Group for engaging in a complex scheme to fraudulently overstate the prices of $3 billion in subprime bonds during the height of the subprime credit crisis.

Mr. Osnato joined the SEC’s Enforcement Division in September 2008.  He was promoted to assistant regional director in the SEC’s New York Office in 2010.  Prior to his arrival at the SEC, Mr. Osnato worked at Shearman & Sterling LLP and later at Linklaters LLP in New York.  He earned his bachelor’s degree from Williams College and his law degree from Fordham Law School.


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