Daniel M. Hawke, Chief of Market Abuse Unit, to Leave SEC After 16 Years of Service

The Securities and Exchange Commission today announced that Daniel M. Hawke, chief of the Division of Enforcement’s Market Abuse Unit and former Director of the Philadelphia Regional Office, is leaving the agency after 16 years of service.  He will step down in August to return to the private sector. 

Mr. Hawke has headed the Market Abuse Unit since its inception in January 2010.  The unit, comprised of more than 60 attorneys and industry specialists in eight SEC offices, focuses on hard-to-detect insider trading activity, market structure violations, market manipulation, and other trading abuses.  Deputy Unit Chiefs Robert Cohen and Joseph Sansone will serve as co-acting Unit Chiefs following Mr. Hawke’s departure.

“For the past 16 years, Dan has tirelessly served the Commission’s Enforcement Division and demonstrated the highest dedication to our mission,” said SEC Chair Mary Jo White.  “His exemplary leadership in multiple senior roles has served the agency well and the investing public is safer for his service.”

“Dan is known for his strategic vision and built the Market Abuse Unit into a trailblazer in the investigation of market structure violations and complex insider trading schemes,” said Andrew Ceresney, Director of the SEC’s Enforcement Division.  “As an important member of our leadership team, he brought significant and innovative actions based on misconduct in the deepest and darkest corners of the market.”

Mr. Hawke said, “It has been a great privilege to serve the public as a member of the Division of Enforcement and to have helped create and then lead the Market Abuse Unit.  I am proud to have worked alongside an extraordinary group of professionals, past and present, whose quest for excellence, relentless investigative efforts and exemplary integrity built the unit into what it is today.”

Under Mr. Hawke’s direction, the Market Abuse Unit used technology and quantitative analysis to detect insider trading and conduct groundbreaking “trader-based” investigations.  He also led the establishment of the unit’s Analysis and Detection Center to identify and evaluate potential violations of the federal securities laws.  SEC enforcement actions brought during Mr. Hawke’s tenure include:

Market Structure

• In the Matter of UBS Securities LLC – charged dark pool operator with disclosure and sub-penny violations and imposed largest civil penalty to date against an alternative trading system
• In the Matter of EDGA Exchange et al. – charged two electronic stock exchanges for failing to describe order types properly and imposed largest civil penalty to date against an exchange
• In the Matter of Knight Capital Americas LLC – first proceeding to enforce SEC’s direct market access rule and imposed the largest civil penalty to date for market access violations
• In the Matter of The NASDAQ Stock Market LLC, et al. – charged NASDAQ with violations arising out of the Facebook IPO
• In the Matter of New York Stock Exchange LLC, et al. – first enforcement action for Regulation NMS data feed violations that imposed first-ever financial penalty against a national stock exchange

Insider Trading

• SEC. v. Matthew H. Kluger, et al. – charged a longstanding insider trading ring with profits in excess of $40 million and resulted in longest criminal sentence to date for insider trading
• SEC v. Vladimir Eydelman, et al. (SMART Technologies) – insider trading action against law firm clerk and stockbroker for trading ahead of more than a dozen merger announcements
• SEC v. Cheng Yi Liang, et al. – charged FDA chemist with trading ahead of new drug approval announcements
• SEC v. Certain Unknown Traders in the Securities of H.J. Heinz Company – emergency enforcement action filed hours after announcement that H.J. Heinz Company was being acquired, resulting in a temporary restraining order and asset freeze of $2 million in alleged ill-gotten profits on suspicious options trading

Market Manipulation

• SEC v. PTG Capital Partners LTD, et al. (Avon) – emergency action to shut down scheme to manipulate multiple securities by filing false tender offers on the SEC’s EDGAR system
• In the Matter of Hold Brothers On-Line Investment Services LLC, et al. – charged market manipulation involving the use of layering strategy

Trading Abuses

• SEC v. Marek Leszczynski, et al. (Linkbrokers) – broker dealer fraud scheme charging four brokers with illegally overcharging customers $18.7 million
• In the Matter of optionsXpress Inc., et al. – charged options market maker with abusive naked short selling and violations of the SEC’s Regulation SHO

Mr. Hawke began his SEC career in 1999 as a staff attorney in the Division of Enforcement in Washington, D.C, and was promoted to branch chief in 2002.  In March 2005, he was appointed as Associate Director for Enforcement in the Philadelphia office and became Regional Director in April 2006.  He received the SEC’s Stanley Sporkin Award in 2008 and the Ellen Ross Award in 2001.  Before joining the SEC, Mr. Hawke spent ten years in private practice in Washington, D.C.