Blackstone has hired a former US Securities and Exchange Commission (SEC) enforcement chief to lead compliance, seven months after agreeing to a $39 million fine levied by the regulator for improper fee disclosure practices.
Marshall Sprung, who left the SEC last month, joins Blackstone as a managing director and global head of compliance, according to a source with direct knowledge of the situation.
Sprung first entered the SEC in 2003, and over the next decade rose to co-chief of asset management enforcement.
“Marshall has served as a thoughtful, creative, and driven co-chief of the asset management unit,” Enforcement Division Director Andrew Ceresney said in announcing Sprung’s departure.
While Marshall was co-chief, the unit brought enforcement against Blackstone and its private equity competitor KKR. The two firms’ fee-related regulatory penalties totaled $69 million last year.
Blackstone in particular attracted fiduciary duty claims, having failed to fully inform investors about accelerated monitoring fees.
Sprung called serving with his team in the SEC’s enforcement division an “honor.”
“I am particularly proud of my colleagues in the asset management unit for their grit and dedication in ferreting out misconduct by investment advisers and developing the expertise need to protect investors from fraud and other unlawful practices in the complex asset management industry,” he said.
Marshall’s departure from the SEC came shortly after that of his former co-chief Julie Riewe, who left to become a partner at regulatory defense law firm Debevoise & Plimpton. Riewe’s successor Anthony Kelly now leads the unit.
Related: The SEC’s New Co-Chief of Asset Management Enforcement & Blackstone Pays $39M for Fee Disclosure Failings