George S. Canellos, who led several of the Securities and Exchange Commission's recent cases, will step down as co-director of the agency's Division of Enforcement, according to an agency statement Friday.
Mr. Canellos headed insider-trading actions against former McKinsey & Co. executive Rajat Gupta, Galleon Group founder Raj Rajaratnam and several managers at S.A.C. Capital as well as the firm's founder, Steven A. Cohen.
He was instrumental in a $150 million SEC settlement with Bank of America over improper disclosure of employee bonuses and financial losses prior to its 2008 merger with Merrill Lynch and led actions against several large financial firms over the sales of mortgage-backed securities and collateralize debt obligations. He also brought fraud charges against JPMorgan traders for derivatives losses in the “London Whale” case.
He has led the division since April 22, along with the other co-director, Andrew Ceresney. Both Mr. Canellos and Mr. Ceresney worked as federal prosecutors with SEC Chairman Mary Jo White, when she served as the U.S. attorney for the Southern District of New York between 1993 and 2001.
Mr. Canellos will leave the SEC by the end of the month, while Mr. Ceresney will stay on as director of enforcement.
Mr. Canellos “has not yet made future career plans,” according to the SEC.
Under the duo, the division has cut a high profile since Ms. White took over the SEC in April and made enforcement a priority.
The SEC statement credited Mr. Canellos for helping to implement one of Ms. White's signature changes: modifying SEC settlement policy to require defendants in some actions to admit wrongdoing.
Previously, defendants typically settled without admitting or denying the charges.
Prior to being named co-director of enforcement, Mr. Canellos, 49, served as deputy director and acting director of the division in 2012 and last year. He joined the SEC in 2009 as director of the New York Regional Office, coming aboard after the multi-billion Bernard Madoff Ponzi scheme was revealed. In response, he implemented changes in investment advisory firm examinations and integrated the teams examining broker-dealers and investment managers, according to the SEC statement.
For the fiscal year ended in September, the SEC filed 686 enforcement actions and collected $3.4 billion in disgorgements and penalties. The number of cases declined from a record set in fiscal 2011, but the payment amount was 22% higher than that year.
Mr. Canellos “helped to improve coordination between the enforcement and exam programs, streamline procedures to expedite investigations and better integrate our investigative and trial functions,” Ms. White said in a statement.