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Financial Services Conflicts of Interest & Fiduciary Duties 2016: Navigating the Emerging Regulatory Maze


Speaker(s): Abigail B. Pancoast, Anthony S. Kelly, Clifford E. Kirsch, Dana L. Platt, Francis J. (Jay) Facciolo, Maria Gattuso, Michael Rufino, Vanessa A. Scott, William J. Delmage
Recorded on: Apr. 20, 2016
PLI Program #: 150665

Bill is an Assistant Regional Director in the SEC’s New York Regional Office’s Investment Adviser/Investment Company examination program.  Bill started his career with the New York Regional Office as a Securities Compliance Examiner in 1990.  Bill was promoted to Branch Chief in 1995 and to his current role in 2002.  Bill has a BBA in Finance & Investments from Baruch College – City University of New York.


Cliff Kirsch began his career at the U.S. Securities and Exchange Commission (SEC), became chief legal officer for one of the country’s largest dually- registered broker-dealer/advisers and then joined Sutherland (now Eversheds Sutherland) in 2006. He relies on his regulatory and in- house background and an up-to-date knowledge of regulatory developments to provide practical and innovative counsel to broker-dealers and investment advisers in the areas of securities regulation and compliance.

With more than 25 years of experience, Cliff regularly counsels clients on the design and distribution of investment products including wrap-fee programs and other advisory products, mutual funds, bank collective investment funds and insurance products. He also focuses on issues related to the design and implementation of compliance programs at financial services firms.

While at the SEC, Cliff received the Manuel F. Cohen Award, which recognizes younger lawyers who have displayed outstanding legal ability, integrity and judgment and he served as assistant director of the SEC's Division of Investment Management.

Cliff is a frequent speaker at industry conferences, and is the author and editor of two of the leading treatises in the broker-dealer and adviser arena: Broker-Dealer Regulation and Investment Adviser Regulation (published by the Practising Law Institute).

Cliff is also co-founder of the Julia Anne Kirsch Foundation, which seeks to serve the needs of disabled individuals and their families.

Experience

Eversheds Sutherland counsels a coalition of major life insurance companies on evolving state and federal regulations and other legal developments.

Eversheds Sutherland represents a coalition of major life insurance companies, which collectively account for more than 80% of the annuity business in the United States, in their efforts to affect the direction and details of various SEC, FINRA, CFTC, NAIC and state rule proposals and initiatives.

Eversheds Sutherland serves as outside counsel on broker-dealer and adviser regulatory issues for one of the largest independent broker-dealer networks in the country.  Eversheds Sutherland serves as regular primary outside counsel on broker-dealer and adviser regulatory issues for one of the largest independent broker-dealer networks in the country.

Eversheds Sutherland represents coalition of collective trust fund sponsors, advisers and other service providers.

Eversheds Sutherland serves as counsel to the Coalition of Collective Trust Funds. Among other things, Sutherland monitors and reports on legal and regulatory matters affecting collective trust funds.

Professional Activities

Member, New York City Bar Association

Faculty, FINRA Compliance Institute at The Wharton School of the University of Pennsylvania

Former Chair, FINRA Variable Products Committee

Former Board Member, National Society of Compliance Professionals


Professor Facciolo practiced for ten years as a transactional corporate attorney in several major New York City law firms before becoming a law professor.  Professor Facciolo is the Assistant Director of the Securities Arbitration Clinic at the St. John's University School of Law and teaches Corporate Finance and Regulation of Mutual Funds. As an adjunct professor, he also teaches Sales and Payment Systems, Securities Regulation and Federal Regulation of Mutual Funds at New York Law School. Finally, he developed and taught a course for several years on the Regulation of Securities Markets and Broker-dealers at Hofstra School of Law. He received his J.D. from Columbia Law School and is a former clerk for Justice Sidney M. Schreiber of the New Jersey Supreme Court.

Among his publications in the area of investment management are the following

Do I Have a Bridge for You: Fiduciary Duties and Financial Advice, 17 University of Pennsylvania Journal of Business Law 101 (2014).

Introduction to Symposium: Revolution in the Regulation of Financial Advice: The U.S., the U.K. and Australia, 87 St. John’s Law Review 297 (2013).

A Broker’s Duty of Best Execution in the Nineteenth and Early Twentieth Centuries, 26 Pace Law Review 155 (2005).

When Deference Becomes Abdication: Immunizing Widespread Broker-Dealer Practices from Judicial Review through the Possibility of SEC Oversight, 73 Mississippi Law Journal 1 (2003).

Co-author of Avoiding the Inevitable:  The Continuing Viability of State Law Claims in the Face of Primary Jurisdiction and Preemption Challenges under the Securities Exchange Act of 1934, 1995 Columbia Business Law Review 525. Cited in "Worth Reading" column of The National Law Journal.

Exculpatory Hedge Clauses in Investment Advisory Contracts: Developments since Heitmen Capital, The Investment Lawyer, February 2014.

Sub-Adviser Fee Litigation: Will Section 36(b) Acquire Some Teeth?, New York Law Journal, March 17, 2015, page 4.

New Wave of Cases Involving Investment Adviser Fees, New York Law Journal, October 4, 2013, page 4.

The Revolution in Investment Adviser Regulation, The Investment Lawyer, October 2011.

When Should a Broker-Dealer Be Treated as an Investment Adviser?, New York Law Journal, August 1, 2011, page 4.

Co-author of Order Flow Cases:  Jurisdiction, Preemption and Securities Laws, New York Law Journal, May 9, 1995, page 1.

Co-author of Double Jeopardy Issues in the Financial Sector, New York Law Journal, August 3, 1994, page 1; reprinted in 20 RICO Law Reporter 1139 (1994).


Summary
Maria is a Principal in Deloitte’s Regulatory and Operations practice and is part of the team leading Deloitte’s initiatives around recently adopted rules affecting the investment management industry. Working within Deloitte's Center for Regulatory Strategies, she focuses on regulatory and compliance matters for Deloitte's investment management clients including investment advisers, wealth managers, mutual fund complexes, hedge funds and private equity funds.  Over her 20-plus year career as an attorney, Maria has acquired extensive experience on a broad range of issues and transactions affecting clients in the investment management industry. She has advised clients on regulatory, compliance and transactional matters involving registered investment companies, business development companies, ETFs, private funds and their investment advisers, including in connection with regulatory examinations, inquiries and impact analysis. 

Ms. Gattuso has served as co-chairperson of the 100 women in hedge fundsTM Legal Peer Advisory Counsel and the Women’s Investment Management Forum.  She has served as an adjunct professor of law of Georgetown University Law Center, where she has taught classes on investment management law.

Ms. Gattuso has participated in conference panels, including those sponsored by the Investment Company Institute, NICSA and Practicing Law Institute regarding important issues affecting the asset management industry.  Topics presented on have included compliance related matters, the DOL Fiduciary Rule, Mutual Fund Modernization, Liquidity Rule, Pay-to-Play regulations, registration requirements for investment advisers, registered closed end funds and business development companies.

Ms. Gattuso is fluent in Spanish.

Prior Experience
Prior to joining Deloitte, Ms. Gattuso was most recently a partner at Willkie Farr & Gallagher LLP. Prior to that, she was a partner at Shearman & Sterling LLP.

Education
University of Pennsylvania JD, 1994
State University of New York at Stony Brook BA, 1990


Vanessa Scott is a partner in Sutherland’s Washington DC tax practice, where she advises on employee benefits and matters related to the Employee Retirement Income Security Act (ERISA).  Ms. Scott counsels domestic and international  insurers on a wide range of regulatory and compliance matters relating to ERISA-governed benefits and retirement services products. She is nationally recognized for her insight on Patient Protection and Affordable Care Act (PPACA) issues, and is a sought-after speaker on the Department of Labor’s (DOL) re-proposal on the definition of investment advice fiduciary.

Ms. Scott is focused on providing creative legal solutions for insurers operating in a quickly changing market. Her experience includes assisting one of the world’s largest international specialty reinsurers with ERISA issues associated with surplus and excess lines, stop-loss insurance, catastrophic coverage and specialty health risks. Ms. Scott also drafted several comment letters regarding the DOL’s fiduciary re-proposal on behalf of insurance groups and financial services firms. As a member of Sutherland’s Privacy and Data Security team, Ms. Scott also has experience advising on Health Insurance Portability and Accountability Act (HIPAA) issues, state health privacy laws, and claims-related cyber risk exposure.

Ms. Scott’s unique practice combines her proficiency with the technical rules that govern ERISA-governed benefits and products with her policy experience as a former Congressional aide and federal government relations representative. She frequently represents her clients’ interests before federal and state agencies and the National Association of Insurance Commissioners, and she has testified before members of Congress on insurance matters relating to the PPACA and healthcare transparency.

Ms. Scott is frequently quoted in the trade press and national publications, and she was named a Washington, D.C. Super Lawyer for the third time in 2015. She serves as Sutherland’s national Chief Diversity Officer  and is an adjunct professor at the Georgetown University Law Center. She attended Duke University and the Vanderbilt University School of Law, and she holds an LL.M. in Taxation from the Georgetown University Law Center.


Ms. Pancoast leads the legal and compliance team that advises the business segment responsible for developing, implementing and distributing Lincoln’s retirement plan products and services.  This includes advising with respect to the development of new products and services, marketing and sales to new and existing clients, and the legal and compliance aspects of serving existing clients and their retirement plans.

Ms. Pancoast joined Lincoln Financial Group in March of 2008.  Prior to joining Lincoln, she worked for nine years as a 401(k) retirement plan recordkeeper and consultant, and for five years in private practice as an employee benefits lawyer.

Ms. Pancoast has served as a speaker on employee benefits issues for various plan sponsor and industry conferences and events. She also speaks frequently on various employee benefits topics internally within Lincoln Financial Group.  She has also written for various publications on qualified retirement plan and other employee benefits-related matters.

Ms. Pancoast holds a Bachelor of Science degree in economics from Pennsylvania State University and a law degree, magna cum laude, from the University of Pennsylvania.  She is a member of the tax sections of the Philadelphia and American Bar Associations and is a member of the American Society of Pension Professionals & Actuaries. She also represents Lincoln on the Retirement Plans Committee of the American Council of Life Insurers (ACLI) and on the Retirement Plans and the Tax Regulatory and Advocacy Committee of the Insured Retirement Institute (IRI), and is a past Chair of both Committees.  She is licensed to practice law in Pennsylvania.


Seasoned compliance professional with keen ability to proactively identify and fearlessly escalate issues using effective communication skills, enfranchising all relevant stakeholders, and actively contributing to risk remediation on a timely basis.

Highly effective communicator able to rapidly educate a global business and other functions on fiduciary requirements.

Successful leader in achieving enterprise-wide objectives of global cross divisional, cross functional initiatives on time and within budget.

Experienced evaluator of interdisciplinary impact of existing and proposed IT systems and processes.

Strategic thought leader in organization and execution of Compliance function through physical and virtual global teams, including,

  • Mitigating risk in regulatory exams
  • Harmonizing standards and practices globally
  • Eliminating institutionalized silos

13+ years’ in-house experience with global organizations employing matrix reporting.  Experienced in dealing with direct reports to C-suite management and all other management levels.

Experienced at regulatory exams; respected by regulators.

Deep experience Investment Advisers Act of 1940 and Investment Company Act of 1940, substantial experience Securities Exchange Act of 1934 and ERISA.  Broad experience with non-US investment management regulatory regimes and finding common ground for fiduciary principles.  Deep experience Reg 9. 

Deep experience in preparing SEC exemptions and preparing Form ADV.

Superior manager highly ranked by direct reports and recognized for successful mentoring.

Astute listener, resulting in effective relationships across seniority levels, functions, countries, ethnicities, genders, and other variables.

Education

University of Virginia School of Law, 1980

The University of Wisconsin-Madison, B.A. with distinction, 1975

Bar Memberships

Virginia, 1981 (inactive); Washington, D.C. 1984; New York, 1997


Anthony S. Kelly focuses his practice on trial, investigations and securities litigation, with an emphasis on matters concerning the asset management industry. As a former co-chief of the Enforcement Division’s Asset Management Unit at the U.S. Securities and Exchange Commission, Mr. Kelly has a thorough background in supervising investigations of misconduct by investment advisers and service providers to mutual funds, ETFs, hedge funds, private equity funds and other investment products. In recognition of his SEC service, he was awarded the Chairman’s Award for Excellence and the Ellen B. Ross Award, which acknowledge his exemplary commitment and performance in enforcing the federal securities laws.

During his time at the SEC, Mr. Kelly oversaw investigations and enforcement actions covering a wide range of asset management-related issues, including fund valuation, fund distribution and 12b-1 fees, conflicts of interest, fund governance, trading away and best execution, trade allocation, cross trading and principal transactions, investment adviser and broker-dealer registration, and whistleblower retaliation.

He also has extensive experience in parallel criminal and SEC investigations and insider trading investigations. He investigated a large-scale insider trading ring involving hedge fund traders and other industry professionals, as well as a serial insider trading scheme involving an investment banker and private equity firm associate. 

Mr. Kelly has spoken at numerous industry and regulatory conferences, hosted by organizations such as the Investment Adviser Association, Investment Company Institute, Managed Funds Association, Mutual Fund Directors Forum, PLI, NYU Program on Corporate Compliance and Enforcement, and American Bar Association.

Education

  • The George Washington University, B.B.A., Finance, 1999, summa cum laude
  •  Georgetown University Law Center, J.D., 2004


Michael Rufino is Executive Vice President and Head of FINRA Member Regulation—Sales Practice. In this capacity, he is responsible for overseeing FINRA’s Sales Practices program, which is made up of 15 District offices across the U.S., and includes the Membership Application Program. Prior to serving in this capacity, Mr. Rufino was the Chief Operating Officer in Member Regulation Sales Practice. Mr. Rufino has been involved in various industry initiatives throughout his career in regulation. He has also served as a member of the Continuing Education (CE) Council, assisted in the creation of Electronic Communications Guidance to the industry and served as a member of the Social Networking Task Force. In addition, he participated in the Financial Action Task Force’s (FATF) initiative to create guidance on the risk-based approach to the prevention of money laundering and terrorist financing as well as the FATF Typology on the Securities Industry. Mr. Rufino graduated magna cum laude from Iona College with a degree in finance, and received his MBA with honors in management information systems from Iona.