The Securities Compliance Podcast: Compliance In Context

Patrick Hayes

Meet Patrick Hayes, investment management counsel at Calfee, Halter & Griswold and your host for The Securities Compliance Podcast presented by the National Society of Compliance Professionals. A personal master class for the securities legal and compliance professional, Patrick’s passion is to help you put Compliance In Context™ by combining the technical expertise of industry thought leaders and innovators with the practical experience of doers and key decision-makers. Listen today to help elevate your firm’s compliance program and take your career to new heights.

  1. 5d ago

    S6:E10 | Building Compliance in an AI World | Compliance in Context

    Welcome back to the Compliance In Context podcast! On today’s show, we discuss how to build a culture of compliance in AI world and some best practices firms are using now to build AI into their respective operations and compliance programs. In our Headlines section, the SEC to Raise Qualified Client Threshold for Performance-Based Fees, SIFMA Re-urges the SEC to Overhaul Communications Retention Rules, and SIFMA Urges SEC to Overhaul Communications Retention Rules, and finally, we close up today with another installment of Outtakes, where we review a recent enforcement action involving fraud and registration charges against three venture capital fund managers and their owner. Show Headlines SEC issued a final order that adjusts the dollar amount thresholds for “qualified clients” under Rule 205-3 of the Investment Advisers Act SIFMA Urges SEC to Overhaul Communications Retention Rules Interview with Erik Olsen How are you seeing firms successfully use AI, both inside and outside of compliance? Have you developed an AI policy? What voices inside the firm did you engage to help draft it (i.e. what departments were consulted)? From an operational perspective, what are the key considerations firms should consider before implementing AI into their systems and processes? What impact has incorporating AI into your firm had from a compliance perspective? What are some of the best practices you see firms implementing across the compliance program to foster a “culture of compliance” where AI feels ever present? Where do you see AI going in the future and what steps are you taking now to help accommodate the changing environment? Outtakes SEC charges venture capital fund managers for making false and misleading disclosures, failing to disclose certain conflicts of interest and failing to comply with Securities Act and Investment Company Act registration requirements. Quotes 14:13 – “Well, it’s, it’s the new shiny toy, right? It’s the souped-up new shiny toy that, as we always hear, you know, our neighbors down the street have and we don’t have, right? The same way they do marketing or, or something like that. So yeah, I agree with you. We got to figure out what is the use case for us because in, you know, us, you, them, it-it’s not going to be equal. Even though we all do asset management, you know, as we know within even the product lineup and the strategies we offer, it’s not all equal. So we do have to do that analysis. What do we use it for? What type of firm are we? Like I said at the top, we’re about 39 people. That AI use may look totally different than a shop that’s 1,000 people, right? Not only just what it... how you use it, what you’re using it for, but even how you even get to implement it.” – Erik Olsen 16:43 – “We are Microsoft Suite users, right? Copilot is basically in there. So we gave everyone the ability to use Copilot for work-related stuff. And in our acceptable use policy, which is an IT-owned policy, we had a section dedicated to large language learning models and AI and what you--basically the limitations. It was basically Copilot or bust. Here are the finer points. You know, put restrictions around trying to get backdoor access to Claude or Gemini or ChatGPT, whatever, et cetera. So that’s been kind of the last, again, let’s say, call it a year. And of course, people want more, which is fine. And the constant pullback was, “Yes, we want, we want more. Explain that to us,” and us re...

    1h 5m

  2. Apr 28

    S6:E9 | FINRA Forward and Some New Rulemaking | Compliance in Context

    Welcome back to the Compliance In Context podcast! On today’s show, we discuss the FINRA Forward initiative and review some of the recent FINRA rulemaking activity in areas like outside business activities, personal securities transactions, gifts and gratuities, and performance advertising. In our Headlines section, the DOL reinstates the prior fiduciary standard under ERISA and Senator Warren Questions SEC Chair on alleged political interference in enforcement, and finally, we close up today with another installment of Outtakes, where a recent lawsuit filed by a former client against an RIA raises important considerations around appropriate disclosures and applicable standards of care. Show Headlines The U.S. Department of Labor (“DOL”) restored its prior five-part test for determining “fiduciary” status under the Employee Retirement Income Security Act (“ERISA”) Senate Banking Committee Member Elizabeth Warren pressed SEC Chair Paul Atkins to address allegations of political interference in enforcement matters before the agency Interview with Ed Wegener What is FINRA Forward? What does FINRA hope to achieve with the FINRA Forward Initiatives? What have we seen to-date? What are the potential benefits? What are some potential challenges? What are the key changes in proposed Rule 3290? What are the key changes for Rule 3220 related to Gifts and Gratuities? What are the key changes Proposed for Advertising (Performance)? Outtakes SEC-registered investment advisor allegedly assured a client that a $10 million bond investment was “guaranteed” before the underlying project collapsed entirely Quotes 10:55 – “It’s clear that things don’t stay the same. Things change. The way we do business, technology, all of that changes, and it’s important for the rules to keep up with that. As well as show regulators enforce those rules. And so, from time to time, it’s really important to take a look and say, ‘What’s changed?’ and ‘Do we need to realign the rules with those changes?” – Ed Wegener 22:00 – “What you’re going to see is not just much more efficient regulators, which is always good, but more effective regulators. And so it’s important for firms to keep up because what you don’t want is regulators coming in with all this information and data and things that you don’t know about.” – Ed Wegener 22:37 – “There’s an opportunity for a great partnership there, between compliance departments and regulators, and this could be a really good way to do that. And the other thing, too, is all of these things are great. It only takes one big scandal to happen for things to just snap back into a much more reactive mode. So that’s one of the things the industry’s got to keep their eye on the ball, just make sure we’re keeping things in check, because we want to continue the momentum of all these changes and don’t want to have to take a step back.” – Ed Wegener 26:44 – “Probably the most important change in the proposal is that it would only apply to investment-related outside activities. So non-investment-related outside activities (such as being employed at a ride share company or working in a retai...

    56 min

  3. Apr 6

    S6:E8 | Amendments to the SEC Enforcement Manual | Compliance in Context

    Welcome back to the Compliance In Context podcast! On today’s show, we will be diving into the SEC Enforcement Manual, and more specifically, to some of the recent amendments that were made and what it tells us about the state of SEC Enforcement right now. To help guide us through the conversation, we are very pleased to welcome in Brian Rubin and Ellen Connell. In our Headlines section, SEC and CFTC begin to clarify application of federal securities laws to cryptocurrency, and finally, we close up today with another installment of Outtakes, where we try to help spread the word about an active phishing campaign targeting FINRA and SEC-registered financial services firms and advisers and how to make sure to avoid getting caught flat-footed. Show Headlines SEC and CFTC jointly issued an interpretive release regarding the application of federal securities laws and federal commodities laws to certain crypto assets and transactions Interview with Brian Rubin and Ellen Connell What is the SEC Enforcement Manual and what is its purpose? The SEC recently announced a broad set of revisions to its Enforcement Manual. At a high level, what was the rationale for the update and what does it tell us about the current state of the Division of Enforcement? What is the new process for obtaining cooperation credit? What are some of other factors the SEC weighs when determining whether to apply cooperation credit? Were there any other noteworthy changes to the manual that firms and individuals should be aware of as they are going through an investigation? The staff indicated greater access to the investigative file, evaluating whether providing access would help the recipient respond meaningfully and help both sides assess the strength of the evidence. Does this really mean greater access to the file?  Are we talking full open jacket? Overall, what is your reaction to the SEC Enforcement Manual updates?  What is the longest lasting impact? Regardless of the increase or decrease in numbers, where do you expect most of the enforcement cases to come from—exams or elsewhere? Keeping in mind the new changes to the SEC Enforcement Manual, do you think firms should take a harder look at self-reporting? Outtakes Active phishing campaign targeting FINRA and SEC-registered financial services firms and advisers Quotes 11:20 – “So the enforcement manual is basically an internal playbook guiding the staff on how to conduct investigations and recommend enforcement actions. When I was there, and I don’t know if this is still the case, it was in a red plastic binder, and we referred to it as the Red Book. It’s to help ensure fairness and consistency, and transparency for the process. And it covers everything from opening investigation to collecting evidence, engaging with companies and individuals, the Wells process, negotiations, cooperation, as we’ll talk about.” – Brian Rubin 13:11 – “This is the first set of updates since 2017, so it’s been quite a while. And the then SEC enforcement director (who just as we’re recording, announced her resignation just yesterday)she was quoted, Judge Margaret Ryan, in the press release explaining the relevance, saying that these updates to the enforcement manual are intended to ensure greater uniformity, to reflect the division’s best practices, to improve the staff’s ability to carry out the SEC’s mission of work on behalf of investors.” – E...

    58 min

  4. Mar 17

    Episode S6:E7 | Tokenization and Crypto—What’s Happening Now? | Compliance in Context

    Welcome back to the Compliance In Context podcast! On today’s show, we will be taking an in-depth look at two of the hottest areas in the investment management space, namely—tokenization and crypto. To help guide us through the conversation, we are very pleased to welcome in two fantastic experts in the space, Louis Froelich and Fizza Khan. In our Headlines section, the SEC is taking a hard look at an electronic delivery rule and the SEC Enforcement Director share details on the Divisions current enforcement approach, and finally, we close up today with another installment of History Has Your Back, where some old quotes from a Stoic philosopher might just give us the push we need to navigate the regulatory filing season. Show Headlines SEC Working on Off-Channel Communications, E-Delivery Rules SEC Enforcement Director Ryan Details Back-to-Basics Approach Interview with Fizza Khan and Louis Froelich What is tokenization? How is it different from crypto? What are some examples of things people are tokenizing? What is the hope with tokenization and also importantly what does tokenization not do? Who can actually invest in tokens? How does tokenization impact compliance? Is this a threat to compliance? How does AI impact tokenization? How does the SEC view this type of innovation? What is one of the biggest things that folks listening to this podcast should keep in mind regarding tokenization? History Has Your Back Using the wisdom of Stoic philosopher Seneca to help compliance officers survive the regulatory filing season Quotes 09:26 – “I think a good way to start to think about tokenization is to focus on what it does, not what it is, right? Tokenization is itself a very technical process. Just like sending an email to someone else is actually very technical, how that all works, right? But everyone knows what it’s like to send and receive an email. Tokenization is not unlike sending and receiving email for digital assets, and digital assets here are legally, and that’s the goal tied to something in the real world. So you can create a tokenized version of something, which is really a digital version of something. It could be a cup, it could be a tape roller…And it could be, or it could be something like a stock, right? You create something that could be transacted digitally. And, as long as we’re going to talk about this today, as long as you take the proper steps, when you create the digital version of it, then what you get is a legally enforceable, standardized version of the thing that can be more easily transferred.” – Louis Froelich 11:55 – “I think the biggest differentiator between crypto and tokenization is crypto is this catch-all term. It’s a catch-all term to define digitalized or digitized assets. And it’s also a catch-all term that these assets, these digital assets, are then transacted on a blockchain. So that in and of itself is something that we can use kind of synonymously when referring to digital assets. I think that’s kind of like the nomenclature people are just reverting back to is saying crypto. And more importantly, I think crypto is, interestingly, the systems on which you transact. So I mentioned the blockchain, but they, you know, everything’s governed by a code as, as what Louis had alluded to with the tokenization process, and it’s all on this blockchain network. Tokenization is...

    55 min

  5. Jan 28

    S6:E6 | SEC Marketing Rule Risk Alert and FAQs—Oh My! | Compliance in Context

    Welcome back to the Compliance In Context podcast! On today’s show, we get to dive deep into one of our favorite topics on this fine show, namely what’s happening with the SEC Marketing Rule and some recent guidance that’s come out from the Division of Examinations and the Division of Investment Management.  To help guide us through the conversation, we are very pleased to welcome back to the show, Chris Mulligan and Jeff Blumberg.  In our Headlines section, we pay tribute to the service of former Commissioner Caroline Crenshaw, and we will also review a recent FINRA proposal covering the financial exploitation of senior investors and a new rule addressing suspected fraud for all customers, and finally, we close up today with another installment of Outtakes, where we continue to see an increased focus from the SEC Division of Enforcement on insider trading and related fraud schemes. Show Headlines SEC Statement on Departure of Commissioner Caroline Crenshaw FINRA Proposes Increased Protections for Senior Investors and Other Vulnerable Customers Interview with Chris Mulligan and Jeff Blumberg Overview of the new Marketing Rule FAQs What is the impact on Footnote 590? Discussion of the purpose and process behind SEC Risk Alerts What does the new Risk Alert tell us about the Marketing Rule? What is the impact on testimonials and endorsements? Reviewing the sufficiency of disclosure requirements, including links to websites and the “clear and prominent” standard What does the Risk Alert say about third-party ratings?  What satisfies the “reasonable belief” standard regarding preparation of third-party ratings? What does the Risk Alert disclose regarding the SEC’s stance regarding compensation structures? When does a statement from a third-party trigger the Marketing Rule? Reviewing the “adoption and entanglement” doctrine and related issues Outtakes SEC Charges Six in $41M Insider Trading Scheme Quotes 08:03 – “I think this FAQ is going to be very welcome by the industry. And it really stems from the fact that the rule itself does not seem to require a model fee. Net returns are defined as gross returns minus the fees and expenses you pay the advisor. There’s a pretty clear definition. And it provides guidance around how you can use a model fee. But it doesn’t really require it in the rule itself. However, Footnote 590–and this is why it was so controversial—said that if the fee to be charged to the intended audience is anticipated to be higher than the actual fees charged, the advisor must use the model fee that reflects the anticipated fee to be charged in order not to violate the rule’s general prohibitions.” – Chris Mulligan 15:24 – “So risk alerts are a really important part of the Division of Examinations. And, you know, they really express what the Staff is seeing on examinations, right? So the priorities come out every year and receive a lot of attention. You know, the reality is the priorities are often very similar year to year. They sort of focused on the issues that, you know, everyone generally knows they’re going to focus on. And it doesn’t talk about the results. Like, what did you actually find on these exams. And that’s where the risk alerts really come in and I think are really terrific docume...

    1h 7m

  6. 12/11/2025

    S6:E5 | Are You Ready For Reg S-P? | Compliance in Context

    Welcome back to the Compliance In Context podcast! On today’s show, we will be serving up everything you need to know about Regulation S-P and the upcoming compliance date for many firms—what are the new requirements, what are firms doing to prepare, and best practices on implementation.  To help guide us through the conversation, we are very pleased to welcome in Kristin Snyder and Charu Chandrasekhar from Debevoise Plimpton. In our Headlines section, we review the 2026 Examination Priorities from the SEC Division of Exams, and finally, we close up today with another installment of History Has Your Back, where we examine what an old quote from an NBA superstar can teach us about conducting annual compliance reviews and the compliance profession. Show Headlines Reviewing the 2026 SEC Examination Priorities Interview with Kristin Snyder and Charu Chandrasekhar Overview of the Reg S-P Amendments What are some of the key considerations firm should consider when implementing the new requirements of Reg S-P into their policies and procedures? What are some best practices if firms decide to build in the relevant provisions of Reg S-P into other sections of the firm’s compliance manual? What about recordkeeping provisions? How does disposal impact other policies and procedures? How can firms properly establish vendor risk management in the wake of the new Reg S-P requirements? How are firms successfully navigating the 72-hour notification requirements? If you were starting a firm from scratch, what are some additional best practices firms should consider when developing their broader information security and cybersecurity framework? What can we expect from the exam staff coming out of the shutdown? What would we expect the SEC to do now that the rule is live? History Has Your Back Quote from Giannis Antetokounmpo regarding success versus failure at work. Quotes 09:00 – “So the amendments, which went into effect in May of 2024. And then as we've all noted, the compliance dates are coming up for large institutions on December 3rd and then for smaller institutions later in the year into 2026 in June. The amendment is actually required, and have brought to bear, a number of significant changes. At a very high level, they now require under the amended reg SP covered institutions and the covered institutions are defined to include broker-dealers, registered investment companies, registered investment advisors, funding portals, and transfer agents must now adopt a formal incident response program and have written policies and procedures that are reasonably designed to detect and respond to and recover from any unauthorized access to or use of customer information. There's a notification requirement that now exists if sensitive customer information was or was reasonably likely to have been accessed or used with that authorization. And I think that the notification provisions are really what's significant for firms, because that notification has to be made as soon as practicable, but no later than 30 days after the advisor becomes aware of a breach.” – Kristen 15:00 – “We've seen it actually done in a combination in which you see a lot of compliance manuals have a section on privacy, on cybersecurity. There's usually a reference to Reg S-P and its obligations. But then actually to implement the reg, the policies and procedures need to live in several different areas, like incident response. That's pure cybersecurity. And so you're likely going to have cybersecurity specific procedures in terms of just drafting the notice, getting it out t...

    51 min

  7. 10/23/2025

    S6:E4 | SEC Enforcement Review – Lessons From The Front Lines | Compliance in Context

    Welcome back to the Compliance In Context podcast! On today’s show, we will be providing a comprehensive, deep-dive look at SEC Enforcement over the last twelve months—including the real story behind some of the recent numbers, distinct areas of focus, and what we’re hearing from the Paul Atkins-led SEC. To help guide us through this important topic and share some fantastic insights for our listeners, we welcome in two expert panelists (and accomplished podcasters), Andrew Dean from Weil Gotshal and Kurt Wolfe from Quinn Emmanuel.   Show Interview with Andrew Dean and Kurt Wolfe Review of SEC Enforcement metrics over the last twelve months What are we hearing from the SEC and Chair Atkins? Reviewing the takeaways from Atkins’ recent statements on the Wells process What are we hearing from the other Commissioners? How have the cuts and departures impacted SEC Enforcement? What typically happens during a transition? Are their programmatic impacts? Understanding key differences between the Division of Exams and the Division of Enforcement How are SEC exams being resolved in the current environment? How are firms interacting with the Staff right now? What can we expect next in the area of SEC Enforcement?   Quotes 05:11 –  “So, you know, the SEC's fiscal year runs October 1 through September 30, and we don't have the final numbers yet from that period. Our friends at Cornerstone always put out a nice report at the end of the year that kind of, you know, tell the story. It will be a little complicated by the fact that this fiscal year was over the course of two commissions that have relatively different approaches to enforcement. And so the first three and a half months of the fiscal year were under Chair Gensler, and the remaining were under interim chair Uyeda, and then Chair Atkins. You know, it’s clear that the enforcement actions are dramatically lower under the Atkins Commission. If we just look at the period, this is our friends at King and Spaulding putout this, and we’re giving a lot of credit to others who have, kind of, done the math for us. Between February and July of 2025 there were 67 enforcement actions. Compare that to 198enforcement actions during the same time period in 2021 when there was another Commission transition.” – Andrew Dean 20:25 – “They should focus on cases where there's a lot of harm to investors or potential harm to investors and not just technical violations, not foot faults. I think many would say that's a different tone or strategy than what we saw in the last administration. He even went out of his out of his way to say, SEC enforcement should never feel like a gotcha game. My third point would be transparency and predictability. I think, again, this is sort of consistent with what we've heard from Chairman Atkins, you know, back when he was a commissioner even, he thinks enforcement action should be consistent. The results should be fairly predictable and tied to SEC policies and coordinated across the divisions.” – Kurt Wolfe

    56 min

  8. 09/24/2025

    S6:E3 | The Impact of Mentorship in Compliance | Compliance in Context

    Welcome back to the Compliance In Context podcast! On today’s show, we will be focusing on the impact of mentorship on compliance, and how as mentors and mentees, we can become the best version of our compliance-selves.  To help guide us through the conversation, we are very pleased to welcome back to the show, attorney and former regulator (and insightful mentor), Richard Szuch. In our Headlines section, we look a notable decline in SEC enforcement actions in 2025 and review the recently announced rulemaking agenda for the SEC in upcoming months,, and finally, we close up today with another installment of Outtakes, where we see continued focus from SEC Enforcement on the Marketing Rule and accurate disclosure of conflicts of interest.   Show Headlines SEC enforcement actions drop sharply, with focus shifting to investor fraud. US SEC unveils agenda to revamp crypto policies, ease Wall Street rules   Interview with Richard Szuch How has mentorship shaped your career as a legal and securities compliance professional? Reviewing the importance of mentoring and mentorship in compliance Understanding the benefits received from mentorship for both the mentee and the mentor What were some of the lessons that you received early on as either a mentee or mentor that inspired you in this area? What are three questions every compliance professional should ask themselves? How does mentorship impact the overall productivity of a compliance team? How to find professional fulfillment in your legal/compliance role For those that are considering taking on a role as mentor or mentee, what additional advice or words of encouragement would you give them?   Outtakes SEC Charges RIA with Marketing, Books and Records, and Compliance Rule Violations   Quotes 16:00 – “Like at the prosecutor’s office. I remember John O’ Reilly saying to me once, ‘Richard, you do not need to be smart enough to know the answer to every question, but you do need tobe smart enough to know when to ask a question.’ And I think the same goes true with navigating with the people you work with.” - Richard Szuch 28:06 – “There is the law, there are the facts, and then there’s the application of judgement to what those facts mean in the legal construct. Same exact thing in compliance. There are the regs. There is the activity, you know, going on, there’s maybe not a bright line answer, and that’s when, you know, having help from older folks or people more experienced than you is really what you’re looking for, or at least as experienced as you.” - Richard Szuch

    55 min
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About

Meet Patrick Hayes, investment management counsel at Calfee, Halter & Griswold and your host for The Securities Compliance Podcast presented by the National Society of Compliance Professionals. A personal master class for the securities legal and compliance professional, Patrick’s passion is to help you put Compliance In Context™ by combining the technical expertise of industry thought leaders and innovators with the practical experience of doers and key decision-makers. Listen today to help elevate your firm’s compliance program and take your career to new heights.

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