Company: Investment Firm
Location: U.S.
Industry: Financial Services: Multi-Strategy Investment Management
Background
An established investment firm engaged ACA to conduct a mock SEC exam following two difficult regulatory examinations that had taken place nearly a decade earlier. Since those exams, the firm has grown significantly and expanded its legal and compliance infrastructure with experienced personnel, ACA technology and consulting support, and new compliance testing related to the issues identified in the prior exams. However, lingering concerns from past experiences continued to influence how senior leadership approached regulatory preparedness.
Challenge
The firm faced several nuanced challenges:
- Legacy exam trauma: Senior leadership, including the managing partner, retained negative perceptions from prior SEC exams, believing the staff had misunderstood the firm’s operations and culture.
- Cultural shift: The firm made substantial changes, such as expanding its compliance team, adopting new technologies, and enhancing testing protocols. However, they still needed to effectively communicate these improvements.
- Internal alignment: The Chief Compliance Officer (CCO), who had joined after the prior exams, needed to understand and address the emotional and strategic impact those experiences had on leadership.
- Narrative control: The firm needed to craft a compelling and credible narrative to demonstrate how it had evolved since the last exams, without appearing defensive or dismissive of past findings.
Solution
ACA designed a mock exam engagement that focused not only on technical compliance, but also on strategic positioning and internal alignment:
- Historical issue review: ACA spent significant time reviewing and discussing the issues raised in the firm’s prior SEC exams to understand their lasting impact.
- “Opening day” deck revisions: ACA collaborated with the firm to revise its “opening day” presentation, emphasizing the firm’s growth, enhanced compliance infrastructure, and proactive steps taken to address past concerns. This included showcasing improvements in trade surveillance through ACA’s Market Abuse Surveillance solution.
- Mock interview with leadership: A simulated interview with the managing partner revealed ongoing concerns about how the firm would be perceived by regulators. This exercise helped the CCO recognize the importance of addressing these concerns directly in future interactions with the SEC.
- Strategic coaching: ACA provided guidance on how to frame the firm’s evolution in a way that acknowledged past challenges while highlighting meaningful progress.
Results
The mock exam engagement delivered measurable outcomes that transformed both the firm’s regulatory posture and leadership confidence:
- Improved internal alignment: The mock exam helped bridge the gap between past experiences and current capabilities, aligning leadership and compliance teams around a unified message.
- Stronger narrative: The revised presentation materials and interview preparation enabled the firm to clearly articulate how it had addressed prior issues and matured as an organization.
- Leadership confidence: The managing partner gained reassurance that the firm could present itself in a new light, supported by tangible improvements and a more robust compliance program.
- Enhanced exam readiness: The firm was better positioned to engage with regulators constructively and confidently in future examinations.
Conclusion
This engagement highlights ACA’s ability to support firms for technical compliance and navigating the psychological and reputational dimensions of regulatory preparedness. By combining strategic insight with practical tools, ACA helped the client turn a legacy challenge into a foundation for future success.
Confidence in SEC Compliance
Looking to enhance your compliance strategy with guidance from former SEC professionals? Reach out to ACA’s SEC Mock Exam team to discover how a customized mock exam can help position your firm for regulatory success.