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On the Hot Seat

Driven by mission to protect investors

David P. Bergers

KAYANA SZYMCZAK FOR THE BOSTON GLOBE

David P. Bergers, acting deputy director of enforcement, Securities and Exchange Commission

David P. Bergers, 45, has been chief of the Securities and Exchange Commission’s Boston office since 2006. Last month, he was asked to take a bigger job in Washington, as acting deputy director of enforcement for the agency. He spoke recently with the Globe’s Beth Healy about his record in Boston and his duties at headquarters during this time of transition at the agency.

How will your role change while you are in Washington?

In many ways, I think my role will be the same as it is now: making sure our staff members have the resources they need to do their work and protect investors and encouraging innovation and new ways of thinking.

What has been the area of greatest focus for you since the financial crisis and the Bernard Madoff scandal?

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Every day we ask the question, “How can we best protect investors?” Or put another way, what steps can we take to detect and stop fraud more quickly, preserve investor assets before they’re gone, and hold people accountable for their crimes. The SEC’s enforcement division has formed five specialized units and brought in additional expertise in high-priority areas such as asset management, which includes investment advisers and private funds, and market abuse, focused on large-scale insider trading and other trading issues.

We also established our Office of Market Intelligence to harness the tremendous amount of information we receive each year through thousands of tips, complaints, and referrals. Last year the office reviewed and triaged over 15,000 tips that we received nationally.

What’s the biggest case your office has handled in recent years?

I look at all of our cases as big because they usually involve investors who have been harmed. When investors lose money, even a small amount, due to fraud, it is a big deal for us.

Since 2004, the SEC’s Boston office has helped return over $1 billion to injured investors. Take the case of an affinity fraud that targeted Cambodian immigrants. The perpetrators emphasized their shared Cambodian heritage to convince investors across 22 states to hand over a portion of their savings, promising that their investment would be the “best chance of fulfilling [their] American dream” and would pay monthly returns to their children and grandchildren. The perpetrators took in nearly $30 million through this pyramid scheme that ultimately collapsed and financially devastated the investors. That case also involved criminal charges brought by the US Attorney’s Office in Massachusetts.

Would you say the culture of the agency has changed since Madoff? The SEC missed that fraud.

I think there’s a renewed sense of mission and a feeling that we have more of the tools we need to be effective. There has been reform across the agency and we’ve taken significant steps to improve the way the commission operates. We’ve also broken down barriers and made it easier for our staff to move quickly.

Where the conduct warrants, we coordinate our actions with federal and state, criminal, civil and regulatory authorities, and we frequently collaborate with international authorities. One example is the case of a Stamford, Conn.-based investment adviser. This adviser, with the help of a Venezuelan accountant, was operating a large-scale Ponzi scheme, and we had to act quickly to stop the fraud, freeze funds held in foreign accounts, and work to get any investor money back into the US. We were able to get $230 million. Just last month, this adviser surrendered to US marshals pending his sentencing.

What do you expect to be the SEC’s priorities over the next few years?

I expect that we will continue to focus on the question of how we can best protect investors. We have established a forensics lab in Washington that can do amazing things — CSI type things — with the latest technologies, to uncover the latest frauds. It does all come back to working to accomplish our mission, which is protecting investors. And to think about that question every day: What can we do to protect investors? That’s what we start with and what we end with.

Beth Healy can be reached at bhealy@globe.com.
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