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Securities Compliance Podcast: Compliance in Context

The Securities Compliance Podcast Season 4: Episode 6

On Season 4 Episode 6 of The Securities Compliance Podcast: Compliance in Context, host and Calfee Partner Patrick D. Hayes takes a comprehensive look at the ever-important topic of valuation, why it's such a key topic for firm regulators, and the role that compliance can play in the process. The episode also reviews a recent risk alert from the Division of Exams on the New Marketing Rule. Finally, Patrick wraps up with a discussion of recent enforcement action and settlement that highlights the importance of valuation and having the right policies and procedures in place. 



  • SEC Division of Examinations issued a Risk Alert discussing the new Marketing Rule

Interview with Tracy Abbott and Ted McCutcheon

  • What is valuation?

  • Why is valuation such a key issue in the investment management space?

  • What are some best practices that firms can use in this space?

  • How does the role of compliance fit into valuation? What should and shouldn’t be included in the CCO’s purview?

  • What is the impact of bad data on valuation?

  • How can firms build proper governance around valuation?

  • The importance of making sure employees understand the rules around valuation.


  • SEC settlement with an investment fund to resolve claims that the fund failed to adopt and implement necessary written policies and procedures related to the valuation of fund portfolio investments.

  • Having the right process, policies, and procedures in place can be just as important as avoiding violative conduct.


12:09 “To get a little more specific, the improper valuation or valuation impacts directly the calculation of fees – what investors pay for the services. Valuation impacts performance advertising and reporting, which is a huge selling point for advisors. You know, valuation impacts the fund's share sale price. Misvaluation or valuation problems…can result in private or regulatory liability for fraud, negligence, breach of fiduciary duty.” – Ted McCutcheon

14:14 – “The first thing you need to look at is, what kind of assets does your firm trade in, right? So is it level one assets, which are just stocks and bonds? Is it level two assets, which are difficult to valuate but there are still pricing services? Or are they level three assets, which are entirely illiquid and very difficult to process? So, I think, from a risk-based approach, it’s really important to just dig right in. First, what is your firm’s business?” – Tracy Abbott

24:40 – “It really is absolutely critical. Even though, sometimes if your policies and procedures are too specific, you’re a little bit limited so it is really difficult to juggle. It really is a balancing act. Especially with some of those level three assets and illiquidity.” – Tracy Abbott

About the Securities Compliance Podcast: Compliance in Context

Introducing the Securities Compliance Podcast: Compliance in Context presented by Calfee, Halter & Griswold, and the National Society of Compliance Professionals and hosted by Patrick D. Hayes, Partner and Chair of Calfee's Investment Management practice.

Designed as a personal master class for the securities legal and compliance professional, this podcast embodies Patrick’s passion 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.

Listeners will find the podcast on Apple Podcast, Google Podcast, Spotify, and Stitcher.

The opinions expressed by guest speakers and panelists during Securities Compliance Podcasts may not necessarily reflect the viewpoints of the attorneys and professionals of Calfee, Halter & Griswold LLP or its subsidiaries or affiliates. Calfee’s educational content is intended to inform and educate readers about legal developments and is not intended as legal advice for any specific individual or specific situation. Please consult with your attorney regarding any legal questions you may have. With regard to all content including case studies or descriptions, past outcomes do not predict future results.


Media Contact

Susan M. Kurz
Chief Marketing & Client Development Officer
216.622.8346 (office)
513.502.8950 (mobile)

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