SEC names co-directors of enforcement

The Securities and Exchange Commission named George Canellos and Andrew Ceresney as co-directors of the agency’s Division of Enforcement on Monday.

Both men have worked in the past with new SEC Chairman Mary Jo White.

Mr. Canellos, who had been serving as acting director of enforcement since January, worked as an assistant attorney to Ms. White while she was the U.S. Attorney for the Southern District of New York in the 1990s and the early 2000s. In that role, he was chief of the major crimes unit and senior trial counsel for the securities and commodities fraud task force.

After working six years as a litigation partner at Milbank, Tweed, Hadley & McCloy LLP, Mr. Canellos, 48, headed the SEC’s New York Regional Office from 2009 to 2012.

Mr. Ceresney, 41, is joining the SEC from the Debevoise & Plimpton LLP, where he was a partner when Ms. White headed the litigation department. Ms. White left the firm to become SEC chairman.

Sen. Charles Grassley, R-Ia., said that the working relationship between Ms. White and Mr. Ceresney was too close for comfort. He warned that they both might be disqualified from SEC cases involving the firm’s former clients.

“The SEC will have to ensure that cases don’t fall by the wayside because of potential conflicts of interest and recusals,” Mr. Grassley said in a statement. “The commission can’t give any impression of favoritism toward former clients of the chairman and co-director of enforcement’s former law firm.”

The appointment of the enforcement co-directors is among the Ms. White’s first moves as head of the agency. She was confirmed by the Senate on April 8.

“George and Andrew are two of the best lawyers and finest people I know,” Ms. White said in a statement. “They are a perfect combination to lead the talented Enforcement Division professionals who protect investors and keep our markets safe and vibrant.”

The division, the largest at the SEC, employs more than 1,200 investigators, trial attorneys and other professionals.

Mr. Ceresney also worked with Ms. White in the U.S. Attorney’s Office, where he was deputy chief appellate attorney and a member of the securities fraud task force and the major crimes unit.

Given her background as a federal prosecutor in New York who jailed crime kingpins and terrorists, Ms. White is expected to emphasize enforcement at the SEC.

Her defense of Wall Street firms and prominent officials while at Debevoise & Plimpton raised concerns during her confirmation hearing about her willingness to crackdown on financial market malfeasance. She assured lawmakers that she would work vigorously for her client at the SEC – investors – and was unanimously confirmed by the Senate.