The Securities Compliance Podcast Season 4 Episode 8 – The Intersection of AI and Compliance

Podcast

Securities Compliance Podcast: Compliance in Context

On Season 4 Episode 8 of The Securities Compliance Podcast: Compliance in Context, host and Calfee Partner Patrick D. Hayes takes a look at one of the most-talked-about subjects over the last 12 months, namely artificial intelligence. Expert Marc Gilman helps us further examine the benefits and impact of AI on a firm’s compliance program. In the Headlines section, Patrick reviews the recent final rule from the SEC detailing new requirements for private fund advisers. The podcast wraps up with another installment of History Has Your Back, where an ancient Japanese artistic practice and related philosophy can perhaps teach a new way to deal with private fund rulemaking.

Show

Headlines

• The SEC adopted significant new regulation of private fund advisers under the Advisers Act, as well as other requirements that apply to all SEC-registered investment advisers

Interview with Marc Gilman

• How has your AI experience evolved over the course of your career?

• The shifts in information management and how to think about information management wholistically?

• How do firms that are using AI approach compliance?

• How does AI find a different way to capture relevant compliance information?

• What are the benefits of AI on the firm’s compliance program?

• In addition to compliance, what are some of the benefits to the business side as well?

• What advice would you give compliance officers out there who may have heard of AI but don’t quite know what to make of it or how to use it in their compliance programs?

• Can compliance use machine learning to help identify items for testing?

• What are some of the other practical uses for AI when it comes to testing or other key areas like cybersecurity?

History Has Your Back

• Understanding how the ancient Japanese artistic practice known as kintsugi and the Japanese philosophy of wabi-sabi can give us perspective on the new SEC private fund rules

Quotes

13:48 – “I think that's a really great, great way to frame it. There's really been a maturation in that space from, you know, kind of thinking about information in kind of silos, whether that's in business units or in, you know, structured versus unstructured types of data. And I think what organizations have realized over time is they really need a holistic approach to that data. Obviously, at Theta Lake we're very concerned with kind of communications data and how that maps into that fabric.” – Marc Gilman 

21:12 – “So just yesterday, big SEC and CFTC announcements of $555 million fines add to the $2 billion that's already been refined by them. So it is a very critical area of compliance focus right now. And I think the recent enforcement actions often get labeled as the WhatsApp fines, just because that was one of the platforms that the regulators had mentioned in some of the earlier enforcements. But I think the way that I look at them is really more like the capture fines, right? Because pursuant to SEC rule 17a4, those communications related to your business as such, it doesn't matter what platform they're taking place on, if they are relevant to your business, you're going to have to capture them.” – Marc Gilman 

32:11 – “The value of having really good compliance where compliance is so often and other functionalities get this too, but you know, you're seen as a cost center solely, right? But in some areas like this one and the ones that you're describing, that's such a perfect example of how having a really great compliance program and building it out in the right way gives you a strategic and competitive advantage over other folks in the same space.” – Patrick Hayes 

45:17 – “There's a lot of different variations, you know, from everything in between the video calls to recordings, to emails, et cetera, yeah, being able to then use that and again, kind of cut through the noise and get to the content that really matters is a much more effective way to really help provide meaningful data and help you run your firm's compliance program.” – Patrick Hayes 

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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.

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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.