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

Interview with Chris Mulligan and Jeff Blumberg

Outtakes

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 documents that help tell industry, you know, in an anonymous way, hey, here’s the issues that you’re seeing and this can really help CCOs.” – Chris Mulligan

18:26 – “Well, the one thing I think we need to make sure we add, and we talked about this briefly when we were prepping, Chris made a point of this, I think, is that once it’s been published in a risk alert, it’s far more likely to end up as a referral to enforcement if you get it wrong. It’s very clear across the industry that this is the SEC’s position now, so you need to pay attention to it. Because if you don’t pay attention to it, you’re far more likely to end up with enforcement breathing down your neck than just a deficiency in your exam.” – Jeff Blumberg

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

Interview with Kristin Snyder and Charu Chandrasekhar

History Has Your Back

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 to customers, making sure it's out the door within 30 days.” – Charu

18:09 –  “Some of the information that I think is meant to be safeguarded (so customer information that is covered by S-P) may not necessarily be a required record, you know, book and record under the Advisers Act. And so you're very, you know, you're correct that I think with disposal, you want to have secure methods in place. – Kristen

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

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

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

Interview with Richard Szuch

Outtakes

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

Welcome back to the Compliance In Context podcast! on today’s show, we will be tackling one of the most significant topics being discussed so far in all of 2025, namely cryptoassets and the SEC’s Crypto Task Force.  To help guide us through the conversation, we are very pleased to welcome back to the show, SEC Commissioner Hester Peirce. As the head of the task force, Commissioner Peirce shares her unique perspective regarding specific focus areas, collaboration with the industry, and other notable items from the first of 2025. In our Headlines section, FinCEN recently announced that the compliance date for the AML Rule for investment advisers is being delayed by two years, and finally, we close up today with another installment of History Has Your Back, where the story of a famous stockbroker and humanitarian demonstrates the importance of unsung heroes.

Show

Headlines

Interview with SEC Commissioner Hester Peirce

History Has Your Back

Quotes

11:35 - “Well, I’m glad that you highlighted Chairman Atkins’ speech because he has taken a position which has just been really refreshing for me to see, which is that this is work that we can do. It’s work that we should be doing and we’re going to do this work. And really setting the tone for wanting to create a welcoming atmosphere for innovation, but also recognizing that there are areas where our existing regulatory framework touches upon crypto and we have to apply it. Now, we do also have a lot of authority from Congress already to use exemptions as necessary to provide relief from regulatory obligations when that makes sense to do that. And so I think with respect to issuance specifically, we do think that a rulemaking would be helpful.” – Hester Peirce 

19:13 - “I should say that self-custody, that term can mean different things, right? I think someone with crypto assets—does that advisor need to go to a third party custodian or can that advisor hold those crypto assets itself? One reason may be that there isn’t a third party that’s out there that’s able to provide custody. Another reason is that you may feel that you can do it better or you can do it in a way that enables you to manage that that in a way that’s beneficial to your client. And so, again, the goal is that you are taking care of that asset, making sure that nothing happens to it, right? So I don’t think anyone should take on the job of custody lightly. And so I think we do have to be careful as we think about that and not just assume that everything is going to be okay.” – Hester Peirce 

21:52 - “We always need to remember that we can’t—we always need to not forget the lessons of the past, even as we’re thinking about whether this new technology maybe should give people more latitude to do different things. We have to keep in mind the risks that we’re trying to protect people from.” – Hester Peirce

Welcome back to the Compliance In Context podcast! On today’s show, on today’s show, we will be taking a topic known all too well by those in the compliance space, namely maximizing your compliance resources, doing less with more, and getting the most out of what’s available to effectively run your firm’s compliance program to the best of your ability. To help guide us through the conversation, we welcome Louis Dempsey and Bart McDonald from Renaissance Regulatory Services.  In our Headlines section, we review a some recent rule withdrawals and some leadership changes at the SEC , and finally, we close up today with another installment of Outtakes, where a recent enforcement action reminds us of the importance of having proper disclosures for fees and conflicts of interest.

Headlines

Interview with Louis Dempsey and Bart McDonald

Outtakes

Quotes

08:48 – “Really, the risk assessments are incredibly important to help you focus where you want to put your energy and put your time and we'll get into some of that later. From a bigger picture standpoint, you want to leverage your custodians, your custodial relationship. They all have tools that they provide and can help from a compliance perspective, whether those are exception reports, trade reports—and don't forget you also most of them have discounts for other vendors—so whether it's proxy services or really a whole host of items, you want to become familiar with that, you want to stay on top of the reporting capabilities, and...you also have the NSCP. So you really want to look at joining compliance roundtables or other peer networks—that really helps from a practical standpoint.” – Bart McDonald

13:06 – “Think of compliance as a journey, as a road trip. You've got a certain amount of things that you need to get done and you've got 365 days to get them done in. Create a map, create a checklist, create a calendar on what you're going to do and when you're going to do it. Don't wait till the end of the year to do all your testing. Do things throughout the course of the year. If you're a big picture person, no matter how much you know the rules, no matter how much you know the laws, no matter how long you've been in the industry, you still have to have that. And if you're not a detailed organized person and you have the resources, hire somebody that is, that can be that navigator for your compliance program.” – Louis Dempsey

34:24 – “Your weakest link is probably your reps. So, you really, especially from a customer information standpoint, so you really want to put some good training together. And, you know, I know that can be “here, do this, you know, this webinar” or “do this little read this,” but you really want to, you know, get in front of them. And, you know, like with anything—like with my kids—you got to say it three times before they hear it. So you really want to push that training.” – Bart McDonald

Welcome back to the Compliance In Context podcast! On today’s show, we will be taking an in-depth look at one of talked compliance items from the first half of the year, the two new recently published FAQs to the SEC Marketing Rule.  To help guide us through the conversation, we welcome in Issa Hanna from Eversheds Sutherland and Ted McKutcheon from Securities Law Counsel.  In our Headlines section, we review a recent denial from the SEC of an attempt by 16 firms to revise settlements they made with the commission regarding their supervision of employees’ off-channel communications, and finally, we close up today with another installment of What’s On My Mind, where we review a quote from a famous chef and author to help provide us in the compliance space with a little bit of satisfaction and peace of mind at this time of year.

Show

Headlines

Interview with Issa Hanna and Ted McKutcheon

What’s On My Mind

Quotes

13:21 – “Folks will recall that the Marketing Rule was officially adopted at the very tail end of the Clayton-era SEC…There were lots of issues that were debated from an interpretive perspective under the rule that fit there. And you had this new category of performance that the SEC seemed to have just made up out of thin air called (so-called) extracted performance. And folks were, kind of, struggling to, kind of, figure out how existing practices in the industry, particularly the private fund industry, would fit into that category of performance.” – Issa Hanna 

40:53 – “Remember that, sure, we're getting some relief with respect to the net of fees requirement here, and certain circumstances. It doesn't necessarily get you an out from the Marketing Rule altogether. That's a really important thing to remember is that if the extracted performance that you're dealing with is still an offer of your advisory services or an offer of a private fund that you're advising, you know, that's still an advertisement subject to other applicable requirements of the rule, including the general prohibitions of the rule. So, you know, you do have to keep that in mind.” – Issa Hanna 

44:45 – “The part of the approach that's deemed okay with respect to the principle of making fair and balanced presentations is this layered disclosure or layered approach to disclosure which is consistent with, you know, something like putting a note referring the consumer of the advertisement, and in this case, the net gross presentation of the gross presentation to disclosure and net presentation located in another part of the document.” – Ted McCutcheon 

Three files total.  Since I was only able to upload one file here, I added the other two files into the shared Dropbox folder.  Please try to enhance the audio as much as possible and if you're able to get the editing completed sooner, it would be greatly appreciated.  Thank you so much for all the help!

Welcome back to the Compliance In Context podcast! On today’s show, we will be reviewing a multitude of regulatory and compliance topics, including artificial intelligence, books and records, types of marketing materials, the SEC Marketing Rule, post-commitment management fees, private fund recycling, and many more fantastic issues in our first ever Compliance Grab Bag!  To help guide us through the conversation, we welcome in Christine Schleppergrell from Morgan Lewis and Christopher Mulligan from Weil Gotshal.  In our Headlines section, we review the first Advisers Act enforcement action under the new administration and what it tells us about future actions, and we close up today with another installment of What’s On My Mind, where a recent statement from Commissioner Peirce provides us deep insight into the future state of crypto and digital currencies and the road ahead.

Show

Headlines

Interview with Christine Schleppegrell and Chris Mulligan

What’s On My Mind

Quotes

15:17 - “There’s a temptation. So there are temptations on both sides, on the exam side and on the registrant side here, right? So investment advisors, obviously AI is a huge force in the economy and investing, and people what to talk about it. And that’s fine in terms of talking about, you know, how this is going to impact markets, how this is going to impact due diligence processes generally, right? You, sort of, can’t live today and not talk about AI. That’s fine. The problem is it’s easy to, sort of, fall into, it’s easy to fall into the representation of how you either use it, how you look for portfolio companies that use it, how it’s part of your management process, right? So it goes to, sort of, a high-level discussion of AI in our, sort of, you know, in, sort of, our culture and our society. And it goes into specific representations about how you are using it.” - Chris  

17:25 - “I think also the other side of the coin is the use of AI for non-investment purposes, so think compliance, operational purposes, to the point that you made earlier, just assessing staffing needs and how those can be addressed, and AI can be a huge time saver. So we’re looking at firms that are, we’re seeing firms that are considering whether they should disclose, for example, in their form ADV, the use of artificial intelligence, even if it is for that internal use case only that we talked about at the top of the podcast.” - Christine 

26:32 - “As they move forward in their journey of creating new communications using AI, maybe to create those communications, it makes it easier if they have that framework in place and they said, ‘Okay, well this looks like the other communications, it’s not an advertisement because X, Y, and Z.’ So it’s a very easy filtering mechanism to use. So just wanted to amplify that point because I think it’s really good. And then one thing to add, I know as we’re talking about back to basics, one thing that I keep going back to and keep getting the question is, ‘What is hypothetical performance?’ So I think that, in addition to what is an advertisement, are two of the really big picture questions that keep coming up, even though we’ve been living with this rule for some time now. But those two concepts because they are broadly defined, especially hypothetical performance, I think really trips people up.” - Christine 

36:57 - “I have a great answer to your question of, ‘Do disclosures have to be on the same page?’ And the answer, the universal answer to that question is, it depends on how many pages you have. If you have a 50-page pitch deck, then I do not think that the hypothetical performance, the mention of that can make its first appearance on slide 49..” - Christine 

Welcome back to the Compliance in Context Podcast! On today’s show, we feature a Lessons From The Front Lines episode where we will be providing a comprehensive, deep-dive look at the 2024 SEC Enforcement numbers published at the end of last year—including what was behind some of the eye-popping numbers, distinct areas of focus, and what firms can expect next under a Paul Atkins-led SEC. To help guide us through this important topic and share some fantastic insights for our listeners, we welcome a fantastic panel of experts, Brian Rubin from Eversheds Sutherland and Jim Lundy from Foley and Lardner.  

Show 

 Interview with Brian Rubin and Jim Lundy 

Quotes 

11:22 - “Speaking of past data not being indicative of future results. In fiscal year ‘24, the commission brought cases against more than 70 firms, resulting in $600 million more in additional penalties, for those of us who’ve been living through this for the past several years. There’s no surprise that prior to January 2025, that leads to some pretty big numbers. And in the release, enforcement touted that since December of 2021, the initiatives in this space have resulted in changes against more than 100 firms and civil penalties in excess of $2 billion. As Brian mentioned, enforcement continued to be busy after the election through its first fiscal quarter for this fiscal year. And recently announced on January 13th, 12 more actions brought against nine investment advisors and three broker-dealers for off-platform books and records, record-keeping violations, and an additional $63.1 million in total penalties brought against those 12 firms” - Jim  

23:17 - “We have a list of a few things that may happen. So, one of them is that there’s probably going to be a push to reduce the time that it takes to investigate cases. Everybody on the defense side and on the enforcement side thinks it takes too long and there’s a variety of reasons that it does take a while. One idea is a simple idea to just simply shorten the time period that investigations have. And although President Trump said he did not read Project 2025, which was a huge sort of white paper on things the new administration could do, one of the recommendations it contained called for statutorily limiting the time for investigations to two years.” - Brian  

32:25 - “My personal view, I’m sure Brian would agree, but testimony sessions are one of the most important aspects of the investigated process for all involved: for the staff, for defense counsel, and (while it can be uncomfortable) for most importantly, the witness. When I went into private practice in 2016, I represented a CEO of a firm. They wanted him for three days. We ended up doing two and a half. It was the other end of the extreme. It was too much. But really, that testimony and most transcripts became incredibly important (in the Wells process that Brian was just talking about) and allowed us to get a really positive result for the client. And I don’t know if we would be afforded that level of interaction in an in-person testimony session today because it’s really the pendulum, I think, flowing too far in the other direction. And what you started to see is brief virtual sessions, with all due respect to the staff, becoming a little too cavalier. A little sloppy. Exhibits are cumbersome to use. Less exhibits were being used. And some of it’s not surprising. It’s just, it’s human nature.” - Jim  

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