Dan Hayes on 13 Years Inside the SEC, What the Volkswagen Case Actually Took to Build

What happens when a trial attorney spends 13 years inside the SEC building the exact kinds of cases that keep executives and general counsels up at night — including the securities fraud case against Volkswagen and its CEO for deceiving US bond investors during the emissions scandal, a case that earned him a framed picture of a carrion hawk from his colleagues after Judge Charles Breyer's opening remarks — and then crosses to the other side of the table to defend the companies and individuals the SEC is coming after? In this episode of the Trustcast Show, Zane Myers speaks with Dan Hayes, partner at Venable LLP in Chicago, about what to do in the first 24 hours after the SEC contacts your company, the critical difference between receiving an informal document request and a formal subpoena, and why the executives who assume the SEC will figure out they did nothing wrong and just go away are operating on a dangerously incorrect assumption. Dan explains what a Wells Notice is and why it is not too late to change the SEC's mind once you receive one, what cooperation actually means in SEC terms versus simply complying with a subpoena, and why the most costly mistake companies make in the early stages of an investigation is failing to get experienced counsel immediately. They also discuss why the SEC can and does bring strict liability charges where intent is not required and good faith is not a defense, how the Volkswagen case required nearly two years of investigative work including testimonies taken from employees in foreign countries before the charges could be filed, why the strategy of fighting everything and giving the SEC as little as possible almost never works because these are smart lawyers from top firms who know what they are doing, what electronic discovery looks like now compared to sitting in a cold warehouse in South Bend sorting through boxes, and the single most important thing a company can do right now to reduce its SEC risk — starting with tone at the top. Dan Hayes is a partner at Venable LLP in Chicago, focusing on SEC and government investigations, commercial litigation, and white collar matters. Connect with Dan Hayes: Email: [email protected] Phone: 312-820-3434 venable.com Chapters 00:00 Introduction to Dan Hayes 00:48 Prosecuting the SEC's case against Volkswagen and CEO Martin Winterkorn — what it was like from the inside 01:34 The sheer volume of fraud that happens at major companies — and learning quickly not to be naive about it 02:31 Tom Petters, Bernie Madoff, and the Ponzi schemes that came before 03:05 Why he left the SEC after 13 years — timing, age, and the decision to switch sides 04:08 How Venable found him and why the culture and the chance to help build the Chicago office sold him 06:39 The SEC just contacted my company — what do I do in the first 24 hours 07:36 The critical difference between an informal document request and a formal subpoena 08:42 My lawyer told me never talk to the SEC without counsel — does that mean ever 09:49 Is there anything I can do during an active investigation to influence the outcome 10:43 How cooperation — real cooperation — differs from simply complying with a subpoena 12:07 Why his experience inside the SEC gives him an edge on the other side — knowing why they ask what they ask 13:14 What a Wells Notice is and whether it is already too late to change the outcome once you receive one 14:51 The most costly mistake companies make in the early stages of an SEC investigation 16:23 Why the public gets frustrated when companies pay fines but executives walk — and why that frustration is valid 17:57 What the SEC can and cannot do — fines and industry bars but not criminal prosecution 19:26 How electronic discovery has changed — from cold warehouses in South Bend to AI-assisted review 21:21 What cooperation with the SEC actually means and when it is not the right move 24:04 How often senior executives genuinely don't know what lower-level employees are doing 26:48 How the Volkswagen case was ultimately built — two years of investigation and overseas testimonies 28:07 Judge Breyer calling the SEC carrion hawks at the first hearing — and the framed picture that followed 30:03 If a company could do only one thing right now to reduce its SEC risk 31:41 Companies assume good intentions mean the SEC will go away — why that is wrong 32:24 Strict liability charges — where intent is not required and good faith is not a defense 33:27 The strategy of fighting everything and giving the SEC as little as possible — has it ever worked 35:39 The most effective defense lawyers he faced when he was at the SEC — what made them effective 36:35 When does Venable get called in — before a rule is passed, after a subpoena arrives, or mid-litigation #DanHayes #VenableLLP #SECDefense #TrustcastShow #SECInvestigation #SecuritiesFraud #WhiteCollarDefense #VWEmissionsScandal #WellsNotice #MarchmanAct