Last fall, the U.S. Securities and Exchange Commission promoted David Fraser to associate regional director for the Fort Worth regional office. Fraser sat down with Rebecca Fike, former SEC senior counsel for enforcement and partner at Vinson & Elkins, to discuss the new role and the challenges and successes he’s had so far in leading enforcement for the FWRO.
Rebecca Fike: Tell us a little bit about your journey to the SEC and your path once you started at the SEC.
David Fraser: I spent the first five years of my practice as an associate at Haynes and Boone, where my practice involved securities, intellectual property and other complex commercial matters. I was fortunate to have a supervisor who was also willing to mentor me: Mike Pegues. Mike was invested in my development as an attorney and made an impression on me as a young lawyer — it’s something I’ve tried to pay forward in whatever ways that I can. I joined the SEC in 2005, first as a staff attorney and then became an SEC trial attorney in 2013 and was promoted to Regional Trial Counsel in 2017. In September 2023, I was promoted to associate regional director for enforcement. In that role, I am directing and overseeing the SEC’s enforcement activities in Texas, Oklahoma, Arkansas and Kansas, and leading a team of more than 60 enforcement staff who have a passion for protecting investors.
Fike: Can you speak to some enforcement priorities for the Fort Worth regional office?
Fraser: This may sound trite, but it really comes down to protecting investors and trying to preserve fair and efficient markets. What makes that particularly challenging is how fast paced and ever changing our industry is. The pandemic and some of the changes it forced have added another layer. For just one example, take our recent insider trading case where a husband misappropriated information from his wife while the two were both teleworking and then traded on that information. From the perspective of particular types of cases we’re prioritizing in the FWRO, I’m guided by trying to maximize our resources and identifying situations where we can have the most positive impact for investors, whether that means offering frauds, regulated entities or individuals, AI, accounting or disclosure frauds, cyber or crypto, market manipulation or insider trading.
Fike: What are some challenges the office is facing?
Fraser: Our region is a huge territory with important industries and businesses. Bloomberg has reported that DFW has passed Chicago and L.A. as the number two area in the country for finance jobs, and it has seen an influx of financial services firms moving to this area. Additionally, we’ve got significant energy industry presences in Houston and Oklahoma City, a significant tech presence in Austin and aerospace and defense-related companies in Wichita and Tulsa. With the size of our region, our office receives and triages a ton of tips, complaints and referrals. It’s an area where I’ve prioritized developing and maintaining productive working relationships with law enforcement partners, including U.S. attorney’s offices, FBI and IRS offices, state securities regulators, FINRA, the FTC, the CFTC and the PCAOB. I think it’s one of the ways that we can collectively cover more ground.
Fike: Tell us a few recent successes.
Fraser: Our entire enforcement team is doing great work, and I’m proud to lead this group. In March, we filed a second enforcement action related to the $300 million CryptoFX Ponzi scheme that targeted more than 40,000 predominantly Latino investors. After filing our initial emergency action in September 2022 to halt the ongoing scheme, we continued to investigate, and we have now charged 17 additional individuals for their roles as leaders of the CryptoFX network and for soliciting investors. In February and April, we filed settled insider trading cases against individuals who traded on material, nonpublic information ahead of an acquisition announcement. In both cases, there were parallel criminal cases. In litigation, we continue to file and to effectively push forward a number of important programmatic cases. Stay tuned for the filing of additional impactful cases.
Fike: What makes an effective defense counsel in an enforcement investigation?
Fraser: Well, let me start with the fact that we respect and appreciate that defense counsel play an important role in our investigations and litigation. I think it is critical for defense counsel to understand our investigative process, our potential causes of action, the relevant law that applies to those claims and the potential remedies that may be in play. Directly related is being able to effectively explain those things to your client. If the investigation moves to settlement discussions, I encourage defense counsel to approach negotiations from a spirit of collaboration to the extent possible. Research comparable cases, provide staff with recent court decisions or SEC settlements and, potentially, articulate to the staff what your client’s cooperation will look like and why that would be valuable to the staff. At the end of the day, I think both sides — SEC enforcement staff and defense counsel — serve their clients’ best interests by taking some time to put themselves in their counterpart’s shoes and trying to view the other side’s perspective.
Fike: What has been your best memory from working at the SEC?
Fraser: I don’t think I can narrow it to one memory — I’ve been really fortunate to have worked with some great people and be involved in a number of high profile and national priority cases. In terms of personal highlights, I think about when I tried three cases in a span of 25 months and achieved great outcomes for the SEC and for investors. Perhaps the most rewarding days have been the ones where we have effected real-time enforcement by filing emergency actions to stop ongoing frauds and to preserve assets for investors. In my various roles over the course of my SEC career, I’ve had a hand in filing 25 successful emergency actions. As I look back, those are some of the days that I’m most proud of, because our ability to protect investors was most tangible.