Tag Archives | Rule 206(4)-5

SEC Issues Second Exemptive Relief from Pay-to-Play

It’s been about a year since the Securities and Exchange Commission granted its first exemptive order Rule 206(4)-5 when an adviser accidentally violated the pay-to-play rule. The SEC has now issued its second relief order. Ares Real Estate Management Holdings filed for exemptive relief after a senior partner wrote a $1,100 check to Colorado Governor […]

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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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Pay to Play and the Supreme Court

The US Supreme Court struck down some campaign finance limitations in McCutcheon v. Federal Election Commission. My first question was whether this court ruling would impact the Securities and Exchange Commission’s Rule 206(4)-5. The answer is “no.” Mr. McCutcheon wanted to contribute $1776 dollars to a long list of political candidates. Each individual contribution is […]

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compliance politics and money

Some Relief for a Fund Manager Under the Political Contributions Rule

SEC Rule 206(4)-5 for investment advisers and fund managers limits the ability of a firm’s employees to make political contributions. It’s a nasty rule. Violation of the rule does not require any bad intent. The breadth of affected political candidates is long, diverse, and hard to discover. Anthony Yoseloff worked at Davidson Kempner Capital Management […]

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SEC Brings a Pay-to-Play Action

The Securities and Exchange Commission filed a “pay-to-play” case against Goldman Sachs and one of its former investment bankers, Neil M.M. Morrison. The SEC alleges that Goldman and Morrison made undisclosed campaign contributions to then-Massachusetts state treasurer Timothy P. Cahill while he was a candidate for governor. The case was brought under the Municipal Securities […]

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Senate Races and SEC Limits on Political Contributions

Last year a new rule from the Securities and Exchange Commission went into effect that limited the ability of investment advisers and private fund managers to make political campaign contributions. The purpose was to prevent some illicit pay-to-play activity by government officials who control government sponsored investment funds. With the close of the national political […]

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The Vice President and SEC’s Pay to Play Rule

Now that the Democratic and Republican conventions have ended and the presidential tickets are final, we can look at how the SEC’s new rule on political contributions will affect the November election. It won’t. Early in the Republican contest for the nomination, Rick Perry was on the watch list under Rule 206(4)-5. Since he could […]

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Pay to Play and Cash Solicitations

The Securities and Exchange Commission extended the date by which registered investment advisers must comply with the ban on third-party solicitation in Rule 206(4)-5 under the Investment Advisers Act. The SEC is extending the compliance date in order to ensure an orderly transition. Since solicitors will need to registered as an investment adviser or a […]

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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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