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SEC Proposal Dives Into Long-Standing Debate About the Duties of Investment Professionals

By David Kornblau, Gerald Hodgkins & Jason Levy on April 25, 2018
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On Wednesday, April 18th, the SEC introduced a much-anticipated package of proposed rules and formal guidance concerning the standards of conduct for financial professionals. The more than 1,000-page proposal, which emerged eight years after Congress required the agency to conduct a study on the topic, addresses whether investment advisers and broker-dealers should have identical or different standards of conduct vis-à-vis their retail customers. This alert takes a look at the four key parts of the SEC’s proposal.

Read the full alert here.

Photo of David Kornblau David Kornblau
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Photo of Gerald Hodgkins Gerald Hodgkins

Gerald Hodgkins has a broad securities enforcement practice focused on representing financial institutions, public companies and individuals in investigations and enforcement actions brought by the key financial regulators. A former Associate Director in the U.S. Securities and Exchange Commission’s Division of Enforcement, Jerry…

Gerald Hodgkins has a broad securities enforcement practice focused on representing financial institutions, public companies and individuals in investigations and enforcement actions brought by the key financial regulators. A former Associate Director in the U.S. Securities and Exchange Commission’s Division of Enforcement, Jerry has extensive experience in matters before the SEC, with particular focus on public company accounting and disclosure, broker-dealer and investment adviser regulation, and U.S. anti-corruption law. He also represents clients in matters before the Public Company Accounting Oversight Board (PCAOB), the Financial Industry Regulatory Authority (FINRA) and the U.S. Department of Justice.

Since joining Covington in 2018, Jerry has represented or advised more than fifty Fortune 500 companies in matters involving the U.S. securities laws, including five Fortune 10 and ten Fortune 50 companies.  He also has represented or advised ten of the one hundred largest financial services firms in the U.S. as ranked by Fortune magazine. 

During his 20-year tenure at the SEC, Jerry oversaw more than 100 enforcement matters, covering the entire breadth of the SEC’s law enforcement authority. In addition to matters involving financial services regulation and public company oversight, Jerry oversaw multiple investigations involving insider trading, the Foreign Corrupt Practices Act (FCPA), and municipal securities regulation. The enforcement actions he oversaw included the largest penalty in SEC history for issuer reporting and disclosure fraud (SEC v. WorldCom), the first, and still largest, settlement involving the clawback of executive compensation under Section 304 of the Sarbanes-Oxley Act of 2002 (SEC v. William W. McGuire, M.D.), and the final dispositions in the SEC’s actions against former Enron officers, including summary judgment obtained by the SEC against Jeffrey K. Skilling, former Enron president, COO and CEO.

Jerry also maintains an active pro bono practice, representing individuals, including veterans, in a variety of unpaid matters. As part of his pro bono practice, Jerry regularly participates in client intake reviews for the Mid-Atlantic Innocence Project and Safe Passage Project. Jerry has also supervised pro bono representations through the National Veterans Legal Services Program, as well as immigration-related matters in coordination with the International Refugee Assistance Project and the ACLU of Southern California.

In 2023, Jerry was elected to a second term on the steering committee of the Corporation, Finance and Securities Law Community of the DC Bar. He frequently speaks at conferences and continuing education programs and has authored several articles focused on SEC enforcement.

In his free time, Jerry is principal trumpet for the Maryland-based Symphony of the Potomac.

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Photo of Jason Levy Jason Levy

Jason Levy helps clients navigate complex issues related to employee benefits and executive compensation, including compliance with the Internal Revenue Code and ERISA. Jason utilizes his deep knowledge in the ERISA space and his background as a former litigator to craft advice that is…

Jason Levy helps clients navigate complex issues related to employee benefits and executive compensation, including compliance with the Internal Revenue Code and ERISA. Jason utilizes his deep knowledge in the ERISA space and his background as a former litigator to craft advice that is both practical and strategic. His practice includes:

  • counseling on design, establishment, administration, and maintenance of qualified defined contribution and defined benefit retirement plans;
  • designing, drafting, and amending a wide range of executive compensation arrangements, including nonqualified deferred compensation plans, equity incentive plans, and change in control bonus plans;
  • representing employment, human resources, and benefit interests in mergers and acquisitions;
  • advising clients on multiemployer plan operations and risk management, including withdrawal liability and plan funding issues; and
  • providing benefits expertise in legislative initiatives.
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  • Posted in:
    Banking, Finance and Securities
  • Organization:
    Covington & Burling LLP

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