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Welcome back to The Securities Compliance Podcast! In the final episode of Season 1, we begin by discussing recent remarks from SEC Commissioner Peirce regarding the Game Stop situation and how it might impact the industry moving forward, as well as a warning from securities regulators to help raise awareness about the threats of social isolation and investment fraud. For our feature interview, we welcome in former NSCP Board Member Rob Tull for an in-depth conversation focusing on the stress and demands inherent in being a legal and compliance professional that can lead to personal and career burnout, and what you can do to reclaim your sanity and energy, and even increase your creativity for problem-solving.  Finally, we’ll wrap up today’s show with another installment of the What’s On My Mind segment, where we do a deep dive on newborn babies, sleep deprivation, and compliance.   Headlines Commissioner Peirce Reaffirms SEC Mission to improve the way markets work and to make them work for more people in Light of GameStop SEC, NASAA, FINRA raise awareness regarding social isolation and Rrsk of investment fraud   Interview Demands of being a legal/compliance professional can lead to personal and career burnout Understanding the causes and impact of stress Managing the challenging expectations of compliance professionals. The fallacy of stress Stressful environments and the impact on decision making Getting comfortable with risks and deep water survivors Best practice recommendations to stay grounded and increasing your creativity for problem-solving   What’s on My Mind Newborn babies and the notion of banking sleep Acclimating yourself to a stressful or challenging environment Training your compliance program to perform at its best   Quotes: “Stress is actually a form of a threat response.” “Deep water survivors are the kind of people that if you were at the beach, they seem like the crazy person that swims way past out the breakers and you're just like “Where are you going? You’re going to drown.” And what I found in people that are like that is that they have an equation for risk which basically says my risk of a problem exists in the first 10 feet of water. Everything else below that is irrelevant. If I solve the top 10 feet of water I'm not drowning, so it doesn't matter how deep the water is. And so that got me thinking about in risk solving...you get so wrapped up in the details that you forget the fundamentals, which is if I do these core things at the top—and again if I just rely on compliance principles, not necessarily the specifics of the rules, but if I know my principles, and I can nail my principles down—then I shouldn't have to worry about how deep the risk is, if I can do the basics, I will survive.  It might not be pretty, but I'll survive.” “So what I found for me is when we're stressed out, we're running on depleted resources. And not only that there's a burnout factor, and it's like it's a question of “What are you willing to lose in the process of burning out?” And, we have to, we have to be willing to step out of that situation.”   Resources: Compliance in Context

Welcome back to The Securities Compliance Podcast! On today’s show, we continue our Lessons From the Front Lines series. Much like our regular shows, this series will provide same excellent content to help you put Compliance In Context™, but will deliver that content in a more narrative form—like a fireside conversation with an industry pro. In this way, the Lessons From the Front Lines series will provide you with practical advice and takeaways that focus on a real-life, tough lessons other compliance professionals and regulators have learned on the front lines of our industry.  To help guide us through today’s show, we welcome in Ed Wegener, the former Senior VP and Midwest Regional Director of FINRA to discuss some real lessons learned on the front lines of the investigation and enforcement process.   Topics: Reviewing the life cycle of a regulatory investigation Analysis of findings from routine examinations, cause examinations or enforcement investigations. Use of data analytics in the investigation process Conclusion of the Investigation Referral to enforcement and escalation of findings Enhanced focus on the impact the supervisory process and requisite due diligence of products, OBAs, private transactions, borrowing from customers, etc. Discussion of policies and procedures and related training protocols How does the firm monitor for compliance with its policy? Reviewing the FINRA 2021 Annual Regulatory and Exam Priorities Industry innovations to enhance the process of investigations and enforcement   Quotes: “When they do conduct an examination, they have been getting really good at taking that information that they gather through things like electronic blotters—putting that through their analytical systems and using that to identify areas of potential focus. And so the way we used to think about it was, it’s trying to find needles in haystacks and the analytics aren’t necessarily going to find the needles for you, but they're going to tell you that if there are needles they're probably in this part of the haystack.” “I think as an examiner at FINRA, what I really want to know is not particularly what I find on the examination, but when I leave the firm, what are they going to be doing to make sure they have controls over the risks that I’m concerned about.” “You know it’s interesting I’m not sure that Reg BI is changing the landscape in terms of that from the perspective of really understanding the products that you're selling. I think there's always been that expectation, you know whether it was reasonable basis—suitability requirement or the care obligation with respect to Reg BI but the important thing is that firms before they start recommending products that they understand those products. They understand the features and the risks and that the people who are selling them understand them as well.”   Resources: Compliance in Context

Welcome back to The Securities Compliance Podcast! On today’s show, we officially launch the Lessons From the Front Lines series. Much like our regular shows, this series will provide the same excellent content to help you put Compliance In Context™, but will deliver that content in a more narrative form—like a fireside conversation with an industry pro. In this way, the Lessons From the Front Lines series will provide you with practical advice and takeaways that focus on real-life, tough lessons other compliance professionals and regulators have learned on the front lines of our industry.  To help guide us through today's conversation, we welcome in Rob Kaplan and Bruce Karpati. In sharing their experiences as former Co-Chiefs of the Asset Management Unit, Bruce and Rob discuss the role of SEC Enforcement and its impact on the industry.    Topics: What is the role of the Division of Enforcement in the industry, and how does the SEC send a strong message in enforcement cases? Review the concept of “regulation through enforcement” Were there consistent failures or compliance violations in the cases you saw in the Asset Management Unit? Discussion of how negotiations that occur in an enforcement case can result in unintended consequences affecting the industry Analyzing the lines between clearly violative activity and “minor” violations Identifying the top one or two lessons learned from each of these cases and the biggest takeaways for compliance   Quotes: “The good public policy way...is when an enforcement matter comes out and it says you cannot do X, right. You cannot have loans to affiliates that are not properly documented because we don't like that. It's when next time somebody comes to the chief compliance officer and says, hey, we're thinking about making this loan to affiliates that they say you know what “[t]here's this enforcement case that says you can't do that,” or the CEO has been waiting or other compliance professional or the GC has been waiting for a case to come out on point to be able to arm them in discussions with the business side to help set the standards.” “If you’re sitting on the compliance side and you read one of these summaries of these orders and you’re still confused as to what you actually have to do, that’s a real problem.” “That to me is the risk: Is that you don’t take something small seriously. You have disclosures that ignore it, it snowballs, and then you have a pattern and practice as it goes on, that you could have really avoided and you don’t know how to get yourself clean.”   Resources: Compliance in Context

Welcome back to The Securities Compliance Podcast. In today’s special episode, we welcome in SEC Commissioner Hester M. Peirce for an in-depth conversation focusing on the controversial topic of Chief Compliance Officer (CCO) liability.  In addition, we discuss the role of outsourced CCOs, the new Marketing Rule, and broker-dealer custody of digital asset securities and cryptocurrencies. She also spoke about the new presidential administration, which will bring in a new SEC Chair and Head of Enforcement, and whether she anticipates a slowdown in dialogue that’s taken place between the regulators and the industry.    Interview   Discussing the motivation to help move the conversation on CCO liability forward Biggest takeaway from the NSCP CCO Liability survey Concerns over whether personal liability will be imposed in cases of simple negligence Thoughts on outsourced Chief Compliance Officers Discussing the impact of a new Administration, SEC Chair, and Head of Enforcement Thoughts on the new SEC Marketing Rule including key takeaways Review the SEC request allowing limited purpose BDs to custody “digital asset securities” Focus areas for Commissioner Peirce in 2021 Career advice for new compliance professionals   Quotes:  “And I think the compliance people at a firm play a really important role in being a bridge and saying to the operational people at the firm, the people who are providing the advice, or doing the day-to-day interfacing with clients, they need to hear from compliance people about how to do that in a way that's compliant with our many rules. And so it's a partnership of sorts. And if you have a liability regime that doesn't work, then you're going to scare good people away from taking those jobs and the whole thing will bring it down.” “But I think it was interesting to see the percentage of people who were worried about the liability uncertainty question and and so seeing that people are trying to grapple with that it was quite enlightening. I think a couple of other things that really struck me.”  “And so how can we put ourselves in the shoes of the compliance officer and say okay this is someone who was really dealing with quite a few issues and was trying to do a good job on those issues. Something fell through the cracks, obviously. That's a very different situation than you when you have someone who has the title of compliance officer and doesn't do anything in the job. Those are the cases where I think the line is sometimes hard to draw and that's the line I really need help drawing.”   Resources:  Compliance in Context  

Welcome back to the Securities Compliance podcast. In today’s episode, we discuss the recently adopted amendments to the Investment Adviser Marketing Rule and a new statement from the SEC alerting investors to a rising number of investment scams. For our interview segment, we welcome in former NSCP Chair and teleworking compliance expert Craig Watanabe to do a deep dive on how firms can best prepare their compliance programs for the increase in teleworking and the types of supervision, cybersecurity, and data privacy issues that are involved there. Finally, we’ll wrap up today’s show with another installment of the What’s On My Mind series, where we’ll look at the new DOL prohibited transaction exemption for investment advice fiduciaries and the greatest comedy centered around Punxsutawney, Pennsylvania.   Headlines SEC Alerts Investors to Rising Number of Investment Scams SEC Adopts Amendments to Investment Adviser Marketing Rule   Interview Review the trend toward decentralization and the impact of the pandemic Compliance challenges that teleworking introduced Fortress versus endpoint security model and teleworking cybersecurity Other tips and recommendations for teleworking cybersecurity Best practices for handling remote supervision Review of regulatory guidance for remote audits   What’s on My Mind Groundhog Day, déjà vu, and the new DOL Prohibited Transaction Exemption for Investment Advice Fiduciaries   Quotes: “And of course, our industry is no exception. We are seeing strong trends toward decentralization, which were evident as you mentioned, prior to the pandemic, but I think just got a huge kick forward with the pandemic and what I think is interesting is most experts believe that this trend will have a residual impact. In other words, when this pandemic is ultimately over, we probably will not go all the way back to baseline, pre-pandemic levels.” “And so the evolution that we are seeing is, we're seeing cybersecurity evolve from a fortress model to an endpoint security model.”  “...Going over and above and being a great compliance department, I think that was all part and parcel of that idea of being not just a good compliance department, but being a great compliance department.”   Resources:  Compliance in Context

On this episode of the Securities Compliance podcast, we’re going to discuss Stephanie Avakian’s departure from the SEC, updates on the proposed marketing and advertising rules, very interesting investment advisor metrics, and some new changes coming to New York state IAR rules. For the interview portion, I chat with Michelle Canella and Hope Brown. The three of us dive into diversity, equity, and inclusion in the financial services industry and discuss the importance of mentors and sponsors. Listen in for a better understanding about what diversity, equity, and inclusion look like in action in the financial services industry.   Headlines Stephanie Avakian steps down from the SEC’s Division of Enforcement. The SEC punts on discussing the proposed advertising and cash solicitation rules Reviewing the IAA/NRS Evolution Revolution Report. Updates to the New York State’s IAR rules   Interview Defining and distinguishing diversity, equity, and inclusion. Ways to implement these concepts inside your organization. How compliance professionals can take on issues of diversity and inclusion. The importance of mentorship and sponsorship in the workplace. NSCP diversity and inclusion efforts and other 2021 activities   History Has Your Back Mentors create environments of trust and safety, stimulating development both personally and professionally. Elevate yourself and your firm by connecting with others to become a mentor or mentee As a tribute to mentors everywhere, a review of Rudyard Kipling’s poem, If   Quotes:  “Well, first and foremost, I really believe that in order to effectuate change, you should change yourself first.” ““I think that mentors and sponsors are both critical to the success of any professional, and in our particular case, compliance professionals. I think, in particular, for women and for people of color, who typically have fewer interactions with leaders within financial services organizations.”   Resources: Compliance in Context

Welcome back to the Compliance In Context podcast! On today’s show, we’ll discuss Jay Clayton’s departure from the SEC and the first real cases from the SEC Enforcement Division's Exchange-Traded Products Initiative.  For our interview segment, we welcome in former NSCP Chair and industry stalwart Miriam Lefkowitz to do a deep dive on how firms can best prepare for the practical application of Regulation Best Interest into their compliance programs.   Finally, we’ll wrap up today’s show with another installment of the What’s On My Mind series, where our focus today will be on the recent rule proposal for “finders” and how this broker-dealer exemption could be just what we need to help struggling businesses with capital formation.   Topics:  Jay Clayton’s announcement of his departure from the SEC Major settlement related to improper sales of volatility-linked exchange-traded products.   Interview REG BI and Form CRS preparation. Practical application of the rule after a full quarter in place How to avoid trip wires Comparing good vs. bad disclosures Methods for staying current with regulations and the NSCP Reg BI Forum   What’s on My Mind SEC Commissioners Encourage Small Business Advisory Committee to Consider Proposed Registration Exemptions for “Finders.”   Quotes: “I think disclosures around monitoring are challenging because there are responsibilities and duties that flow from whether your broker or whether you're an investment advisor.” “The SEC did discuss...the nature and the scope of the review, they've done to date and true to their word. They're looking for good faith efforts to comply. And for the most part they found it.”   Resources: Compliance in Context

Welcome back to the Compliance In Context Podcast! In this episode, we discuss recent rulemaking from FINRA on remote inspections of broker-dealers and check in with OCIE on a risk alert highlighting deficiencies seen in adviser branch exams.  Our interview segment today features SEC and FINRA enforcement guru Brian Rubin for a deep dive into recent trends from the regulators and what to look out for in the future. Finally, we continue the next installment of the Outtakes series to discuss the proper allocation of business and personal expenses.   Topics:   Headlines FINRA Proposes Rule Change on Remote Inspections OCIE Highlights Supervisory Deficiencies at Adviser Branch Offices   Interview Reviewing recent trends in SEC and FINRA enforcement actions. Forecasting future enforcement action stemming from COVID-19 and Reg BI Discussing recent remarks from SEC Commissioner Peirce on CCO liability Detailing NSCP Currents authorship and related topics Outtakes  The proper allocation of business versus personal expenses and how to avoid violations of federal securities laws   Quotes: “We have heard that with regard to penalties and financial sanctions, we are looking at record numbers.”  “In two, three years, I expect we’ll see enforcement actions related to Reg BI, as well.”  "Ultimately, compliance is here to help elevate the services that our firms provide their respective clients...And so, we want to be able to reward those folks that are part of that process to help elevate those services.”   Resources: Compliance in Context

Welcome back to The Securities Compliance Podcast. In this episode, we cover the controversial issue of Chief Compliance Officer (CCO) liability and address recent remarks and recommendations from SEC’s Commissioner Hester M. Peirce to clarify CCO responsibilities. The interview segment features Rob Kaplan and Bruce Karpati discussing the origin story of SEC’s Asset Management Unit. Finally, we continue the History Has Your Back series by taking deep look into a letter from Julius Caesar to Cicero during the Roman Civil War to shine a light on opportunities for personal and professional growth. Based on listener feedback, regular episodes of The Securities Compliance Podcast will drop every two weeks and may occasionally offer extended interviews with bonus content. In addition, the podcast will expand its offerings to include a master class miniseries for members of the National Society of Compliance Professionals (NSCP), and the future launch of the Lessons From the Frontline series.   Headlines: When the Nail Fails–Remarks before the National Society of Compliance Professionals analyzing CCO liability   Interview: Origin Story: Asset Management Unit’s evolution and impact SEC: Building the expertise in specialized areas, including five experts and fundamental areas of investment management Process initiatives and improvements Seeds of Collaboration: Leverage expertise across different SEC divisions Conflicts of Interest represented the foundation for issues review by the AMU NSCP Private Fund Forum Horizon issues for private funds: supervisory responsibilities and valuation issues   History Has Your Back: Ancient Rome is split between two separate factions In a letter to Cicero, Julius Caesar employs a strategy of mercy and empathy as a sign of true strength. Compliance professionals can show real strength and gain credibility inside their firms through understanding and empathy   Resources: Compliance in Context

Welcome back to the Securities Compliance podcast. On this episode, Today, we cover the SEC's new rule proposal regarding private issuers and raising capital and recent criticism to the amendments for Form 13F .  Later, I speak with Chuck Senatore regarding the importance of FinTech and RegTech in the financial services industry and in your firm’s compliance program.  Chuck is a board member and advisor to an assortment of FinTech, RegTech, and cryptocurrency companies. He currently teaches a course on compliance and regulatory strategy at the University of Chicago, and is the founder of the Boston RegTech Meetup.   At the end of the show, we launch the History Has Your Back series by reviewing the keynote address during the 2016 NSCP National Conference to foreshadow the importance of FinTech/RegTech in the investment management industry.   Thanks for tuning in!   Headlines   SEC Proposes Exemption from Broker-Dealer Registration for Small Finders Amendments to Form 13F reporting requirements.   Interview Machine learning and impact of AI in financial services Harnessing technology for better insight and outcomes of compliance testing Blockchain and its impact on future examinations   History has Your Back  How important is FinTech/RegTech to the regulators? We go back in time to look at the National Society of Compliance Professionals 2016 National Conference keynote address by Marc Wyatt, Acting Director of the OC.   Quotes:  “And to the extent that you can harness the technology to bring greater insight, the more ability you have to kind of avoid the wasted time of running down ratholes to determine whether something is a false positive or not.” “While you don’t necessarily need to be a data scientist, having a working knowledge of this space and how you can best leverage data is really important.”   Resources: Compliance in Context

Welcome back to the second episode of the Securities Compliance Podcast. Today, we cover breaking developments on the whistleblower front and new trends in SEC enforcement. Later, I speak with ERISA expert David Kaleda, principal at Groom Law Group, to discuss the latest developments with the new DOL Fiduciary Rule and its impact on the investment management industry. David brings a wealth of experience on all things ERISA and matters impacting the investment and plan space, and he has previously served on the Department of Labor’s ERISA Advisory Council. At the end of the show, we launch the What’s On My Mind series featuring a nuanced take on a contemporary issue affecting the investment management industry.  In today’s segment, we’re looking at the convoluted and confusing area of ESG disclosures.   Thank you for tuning in. We hope you subscribe and join us next time!    Headlines Updates to whistleblower statutes. SEC enforcement trends   Interview Breakdown the new DOL Fiduciary Rule and related Preamble Review the five-part test How to apply the proposed rule in your compliance program now Impact of the plaintiff’s bar David’s predictions for the future.   What’s On My Mind The convoluted world of ESG disclosures.   Quotes:  “...And in that preamble, the department suggests that it’s going to change its views...on when a person acts as a fiduciary for purposes of investment advice.” “By putting this language in the preamble...theoretically, that should apply right now.” “...It’s always tough to anticipate what the government’s gonna do, but in an election year, it gets that much more challenging.”   Resources: Compliance in Context

Welcome to the first full episode of the Securities Compliance Podcast! A personal master class for the securities legal and compliance professional, we started this podcast with the mission of helping people put Compliance In Context™. At the start of each episode, we will cover some of the “hottest” compliance topics of the day, focusing on the news and noteworthy events that impact your firm’s compliance program. Today’s show will review the impact of the new accredited investor rule and some recent risk alerts focusing on cybersecurity. The second segment of each show will take our master class to the next level and feature an expert guest to do a deep dive on a significant topic affecting our industry. Today, we speak with Natasha Greiner, the Associate Director of the IA/IC Examination Office within the SEC’s Office of Compliance Inspections & Examinations. Together, we discuss her work and the current state of the OCIE. The final segment of our first episode will launch the Outtakes series. If compliance were a TV show, think of this is as the bloopers reel, where we look at humorous activities carried out at financial services firms that hopefully provide us all with a roadmap of what not to do inside our firms and our compliance programs.   We hope you tune in and subscribe for future episodes!   Headlines SEC expanding definitions of accredited investors. Combating cybersecurity threats.   Interview How OCIE has managed to remain fully operational. Conducting outreach despite the pandemic. Natasha’s work history and its impact on her current role. What’s next for OCIE? How Natasha and her family are handling quarantine.   Outtakes Text messages and how to avoid violations of recordkeeping rules   Quotes: "What we’ve done historically, in other times of market stress, we’ve really being trying to actively engage in ongoing outreach with registrants. And I’m really proud of this. I think we have done over three-hundred outreach events since FY 2020." - Natasha Greiner   Resources: Compliance in Context

Meet Patrick Hayes, your host for The Securities Compliance Podcast. 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.