The hedge fund industry stands at an uncertain juncture, with a new president set to take office in Washington in January 2017, and the announcement that SEC Chair Mary Jo White will be stepping down in the same month. While some observers expect the incoming administration to be generally pro-business and averse to overregulation, it may not be easy to alter or transform an environment in which aggressive financial regulatory policies have become the norm – including a rigorous crackdown on “pay to play” practices, insider trading and conflicts of interest; a growing use of, and reliance on, innovative data analytics to prosecute traders and investment managers; aggressive whistleblower incentives; and a push to bring enforcement cases on the SEC’s “home turf” through administrative law proceedings. The above practices were the subject of a recent panel discussion hosted by BakerHostetler and featuring Marc Powers and Mark Kornfeld, partners in BakerHostetler’s securities litigation practice; Walter Van Dorn, partner and national leader of the firm’s international securities and capital markets practices; and Michelle Chopper, director of the advisory and consulting practices at Arthur Bell. The key takeaways from the panel are presented in this two-part series. This first article reviews the nuances and potential pitfalls of the pay to play rule, the current priorities of the SEC’s enforcement program and the role of technology in detecting violations. The second article will discuss the SEC’s use of administrative proceedings to try enforcement cases, the impact of the Dodd-Frank Act’s whistleblower program and guidance for managers on approaching a regulatory exam or investigation. For recent insight from Powers and Kornfeld, see “‘Gatekeeper’ Actions by the SEC and Investors Against Administrators Challenge Private Fund Industry” (Sep. 8, 2016); and “A New Look at an Old Standard: The Power of Minority Bondholders Under the Trust Indenture Act” (Mar. 5, 2015).