W. Hardy Callcott

Enforcement

• Multiple broker-dealers in SEC investigation of browser-based order-handling practices.
• Firms and individuals in SEC investigations of off-channel communications.
• A biotech company in SEC investigation of disclosure and trading around release of FDA clinical trial results.
• Multiple bank executives in SEC/DOJ/FDIC investigations of failed regional banks.
• An investment adviser in SEC investigation of alleged conflicts involving dual securities/insurance agency employees.
• Multiple investment advisers in SEC examinations and investigations of disclosures concerning bank sweep programs, Rule 12b-1 fees, and mutual fund revenue-sharing.
• Multiple broker-dealers in FINRA and SEC investigations concerning best execution in equity and options markets.
• National broker-dealers in FINRA investigations of mutual fund rights of reinstatement and CFTC waivers.
• A digital assets company in SEC investigation of unregistered broker-dealer activity; matter settled with no penalty, no disgorgement, no compliance consultant, no individuals named and recognition of extraordinary cooperation.
• A mutual fund adviser in SEC investigation of valuation of fixed income securities during early-pandemic periods of illiquidity; SEC staff closed investigation without action.
• A former senior executive of company in SEC investigation of digital assets private placement by company; SEC staff closed investigation without action.
• A broker-dealer in connection with FINRA investigation of SPAC transactions; FINRA staff closed investigation without action.
• A FinTech investment adviser in SEC investigation of rebalancing decisions for automated investment advisory service.
• A mutual fund adviser in SEC investigation of portfolio holding ratings disclosure.
• A senior executive of broker-dealer in SEC investigation of separately managed account trading; SEC closed investigation without action as to the executive.
• A regional broker-dealer in SEC/FINRA investigations of potential cross trades; investigations closed without action.
• A consultant in SEC investigation of alleged unregistered municipal advisor activity; settled with de minimis penalty.
• A public company in SEC investigation of potential “channel-stuffing” activities alleged by whistleblower.
• A cryptocurrency startup in SEC investigation of potential SEC registration issues; investigation closed without action.
• An international broker-dealer in settlement of FINRA AWC of capacity disclosure on trade confirmations.
• An investment adviser in joint SEC/DOJ investigation of convertible bond arbitrage transaction; investigations closed without action.
• An exempt reporting adviser in SEC investigation of supposed aberrant performance; investigation closed without action.
• An affiliated broker-dealer and investment adviser in settlement of SEC investigation concerning adequacy of information barriers; avoided imposition of independent compliance consultant.
• A regional broker-dealer in settlement of FINRA AWC concerning compliance with research analyst rules; obtained lowest penalty of any firm in FINRA sweep.
• A national broker-dealer in SEC investigation of internalization, payment for order flow, and other retail order-handling practices.
• A registered investment adviser in investigation by SEC Office of International Affairs, on behalf of foreign securities regulator, in trading in foreign security before takeover announcement.
• A national investment adviser in SEC investigation of municipal securities mutual fund actions during financial crisis; investigation closed without action.
• A regional broker-dealer in FINRA settlement concerning information security breach.
• A branch manager of national broker-dealer in SEC investigation of hedge-fund sales activities by brokers in the manager’s branch office; investigation closed without action.
• An audit engagement partner of Big Four accounting firm in SEC investigation of “bill and hold” accounting violations by public company; after Wells submission to SEC, investigation closed without action.
• One of nation’s 20 largest mutual fund investment advisers in multi-agency federal and state investigations of mutual fund market timing and late trading; after writing Wells submission, no agency brought any charges against this adviser or its officers or employees.

Counseling

• SIFMA and counseling broker-dealers in response to SEC application of Rule 15c2-11 to fixed income securities.
• SIFMA in comments on proposed SEC best execution rule, as applied to fixed income securities markets.
• Clients in implementation of fractional equities and bond trading programs.
• Multiple broker-dealers and investment advisers on implementation of Form CRS, Regulation Best Interest and SEC Fiduciary Interpretation.
• Led ABA Business Law Section comment letter on SEC predictive data analytics rule proposal.
• SIFMA in comments on FINRA regulatory notice concerning complex products.
• Prudential Financial, Inc. in the sale of a US$31 billion portion of its in-force legacy variable annuity block for US$2.2 billion to Fortitude Re, Bermuda’s largest multi-line reinsurer (pending).
• A national broker-dealer in acquiring intellectual property relating to securities selection and fractional trading from FinTech firm.
• Counseled multiple broker-dealers on compliance with FINRA Advertising Regulation guidance on target returns and internal rates of return presentation.
• A national automated investment adviser in SEC exam concerning potential bias toward proprietary products; SEC exam staff dropped proposed finding.
• A market-making firm in SEC exam concerning potential best execution violations; SEC exam staff dropped proposed finding.
• A newly formed insurance holding company in obtaining FINRA approval of change in control of broker-dealer.
• A cryptocurrency foundation in obtaining SEC staff guidance that tokens were no longer securities.
• Multiple broker-dealers in responding to SEC and FINRA exams on AML issues.
• A national broker-dealer in connection with prospectus delivery issues and subsequent rescission offer and regulatory self-reporting.
• SIFMA in commenting on FINRA retrospective review of communications with the public rules and gifts and entertainment rules.
• SIFMA in comments on revisions to SEC whistleblower rules, and comments to DOJ on new whistleblower program.
• A regional broker-dealer in SEC exam of due diligence on secondary offerings by China-based issuers; exam closed without action.
• Obtained SEC no-action letter for online venture capital adviser that adviser’s offer of single-purpose-vehicle investment funds did not require registration as a broker-dealer.
• Obtained FINRA interpretative letter allowing broker-dealers to change sweep money market funds without prior notice when funds close or “break a buck.”

Some of the above matters were handled by Hardy prior to joining Sidley.

Hardy maintains an active pro bono practice, including representation of:

• A coalition of immigrant rights organizations in obtaining nationwide preliminary injunction against extraordinary fee increases for all types of immigration and naturalization relief.
• A human rights organization in filing amicus brief opposing “remain in Mexico” policy for asylum seekers.
• An immigrant rights organizations in filing amicus briefs defending California state and local sanctuary laws and policies.
• An immigrant rights organization in multiple FOIA cases seeking documents concerning ICE enforcement activities.

• Board Member, Immigrant Legal Resource Center
• Member, SEC Historical Society (formerly president and chairman)
• Past Chair, Subcommittee on Trading and Markets, Committee on Federal Regulation of Securities, Business Law Section, American Bar Association
• Subcommittee on Investment Companies and Investment Advisers, Committee on Federal Regulation of Securities, Business Law Section, American Bar Association
• Co-Chair, Subcommittee on Civil Litigation and SEC Enforcement, Committee on Federal Regulation of Securities, Business Law Section American Bar Association (past)
• Chair, On-Line Brokerage Committee, Securities Industry Association (past)
• Ad Hoc Committee on Books and Records, Security Industry Association (past)
• Joint Working Group on Extended Hours Training, NYSE/NASD (past)
• Member, American Bar Association