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Another Pay-to-Play Case

There are few among us who think the high cost of getting elected and fundraising that it requires is good for American politics. The SEC took a moral high ground and passed Rule 206(4)-5. That rule effectively prohibits investment managers from making political contributions to politicians who control pension money, other than small token amounts. […]

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Politician: Holding Out a Stack of Money

Pay to Play Rule In Effect on July 31

The Securities and Exchange Commission announced the compliance date for the ban on third-party solicitation pursuant to the Pay-to-Play rule: July 31, 2015. Rule 206(4)-5 prohibits an investment adviser from providing compensated services to a government entity, following a political contribution to certain officials of that entity. Rule 206(4)-5 became effective on September 13, 2010 […]

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$250 Could Cost a Firm $6.1 Million

A T. Rowe Price vice president made a $250 contribution to the campaign of Scott Walker for governor of Wisconsin in a recall election. That small donation could have cost T. Rowe Price $6.1 million in fees. The SEC’s Rule 206(4)-5 once again shows it scary side to advisers. Fortunately, the Securities and Exchange Commission […]

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USDC for DC Meade_and_Prettyman_Courthouse

Lawsuit Against SEC’s Political Contribution Rule

The New York Republican State Committee and the Tennessee Republican Party brought suit against the Securities and Exchange Commission challenging its political contributions rule for investment advisers, Rule 206(4)-5. The complaint seeks an injunction against the enforcement of the rule’s political contribution restrictions on contributions to federal candidates. The first attack on the rule is […]

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SEC Charges Private Equity Firm With Pay-to-Play Violations

The SEC has brought its first case under the pay-to-play rule for registered investment advisers. It’s just as horrible as I thought it would be. The Securities and Exchange Commission enacted Rule 206(4)-5 to address pay-to-play abuses involving campaign contributions made by registered investment advisers and their key employees. The concern was contributions to government […]

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top secret

California’s Public Disclosure of Private Fund Investments

One of the challenges with having a government pension plan investor is the potential disclosure obligations under the states’ sunshine laws. A similar problem exists with Securities and Exchange Commission. The SEC is subject to the Freedom of Information Act and exam information is potentially subject to some level of disclosure. But the state level […]

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kissing sailor in Times Square, New York City

New York City “Pay-to-Play” Law is Upheld

The U.S. Court of Appeals for the Second Circuit upheld a New York City “pay-to-play” law against various constitutional challenges: Ognibene v. Parkes. The Pay to play law is in Local Law 34 and it: Lowers the caps applicable to campaign contributions from parties that have “business dealings” with New York City to $400 (otherwise […]

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PCAOB is Fixed – May Take Other Agencies Down (or get Fixed)

In the Free Enterprise vs. PCAOB decision, the Supreme Court found that a double layer of limitation of firing for cause is unconstitutional. You can’t have an agency where the officers are only removable for cause under another federal agency whose members are only removable for cause. One level of protected tenure is acceptable, but […]

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School Official Disciplined for Misuse of LexisNexis

The Massachusetts State Ethics Commission fined Mark Rivera, the former Lawrence School Department Urban Affairs Liaison and Special Assistant to the School Superintendent, for misuse of his access rights to LexisNexis. The Lawrence School Department purchased access to the LexisNexis database so Rivera could obtain contact information for parents no longer living in the district, […]

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FINRA and Placement Agents

Will FINRA step in to prevent a ban on placement agents working with government investors? You may remember that last August, the SEC published a proposed rule that would create a prohibition on paying a third party, such as a placement agent, to solicit a government client on behalf of the investment adviser: IA-2910. The […]

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