Tag Archives: pay-to-play

MSRB Pay-to-Play Challenge Stymied by Sixth Circuit over Standing

Over the past few years, a few state political party committees have relentlessly sought to block or overturn pay-to-play laws overseen by the Securities and Exchange Commission (SEC). Yesterday, the Sixth Circuit delivered another defeat to an ongoing effort to challenge federal pay-to-play laws. Last year, we noted that the Municipal Securities Rulemaking Board (MSRB) … Continue Reading

Enforcement, Clarity Delayed for FINRA Pay-to-Play and Third Party Solicitation Rules

The Securities and Exchange Commission announced Tuesday that it will allow further comment on a pay-to-play rule proposed by the Financial Industry Regulatory Authority (FINRA). As we discussed previously, if the SEC approves FINRA’s pay-to-play rule, it would clarify that investment advisers are allowed to hire third party solicitors if they are subject to FINRA … Continue Reading

Expanded March 30 Filing Enhances Pay-to-Play Disclosure, Highlights Penalties for New Jersey Government Contractors

New Jersey is well-known for having strict, comprehensive, and complex pay-to-play laws.  Two new changes to an annual pay-to-play filing required of some government contractors will only enhance that reputation. State law requires a company that receives $50,000 annually through government contracts in New Jersey to file a report by March 30 of the following … Continue Reading

MSRB Pay-to-Play Rule Expanded, Opening Door to Enforcement

On Wednesday, the Municipal Securities Rulemaking Board (MSRB) announced that its expanded pay-to-play rules will cover municipal advisors, including third-party solicitors, as of August 17, 2016. As we noted previously and discussed during Covington’s Corporate Political Activity & Government Affairs Compliance Conference earlier this month, the MSRB has been drafting an expansion to its pay-to-play … Continue Reading

SEC Issues Fines for Pay-to-Play Violations That Predate Its Pay-to-Play Rule

A $12 million settlement announced last week by the Securities & Exchange Commission suggests that the SEC will aggressively pursue alleged schemes connecting political contributions to government contracts even if the political contributions do not violate its 2010 pay-to-play rule.  According to the settlement order, in 2010, the head of Public Funds at State Street … Continue Reading

What’s Next for the SEC Pay-to-Play Rule Challenge?

Yesterday’s D.C. Circuit opinion upholding the SEC’s burdensome “pay-to-play” rule on procedural grounds is bad news for those questioning the rule’s constitutionality.  Nevertheless, the rule is still far from invincible. The SEC pay-to-play rule, among other things, effectively prohibits investment firm executives from making certain political contributions to state and local officeholders and candidates.  Last … Continue Reading

Highlights from Wagner; D.C. Circuit Upholds Contributions Restrictions But Limits Ruling

The Wagner case, decided today by the D.C. Circuit, is important because of its analysis of the constitutionality of federal campaign contribution restrictions and, by extension, of pay-to-play laws generally. Covington has been monitoring this case since the district court decision in 2012, to the argument before the D.C. Circuit in 2013, and the decision … Continue Reading

Hawaii Pay-To-Play Law Survives Legal Challenge

Despite potential vulnerabilities, Hawaii’s pay-to-play law survived a significant challenge in the Ninth Circuit last week.  The matter involved an electrical-construction company, its CEO and a second individual who challenged several sections of Hawaii’s campaign finance law, including a requirement that the company register and report its activities once it crossed a $1,000 threshold, and … Continue Reading

Christie Vetoes Controversial New Jersey Pay-to-Play Provision

Earlier this week, New Jersey Governor Chris Christie vetoed key aspects of a bill that would have imposed new restrictions on the ability of national and federal political party committees to raise money from Wall Street and financial executives.  The bill, as we have previously discussed, sought to apply the state’s notoriously stringent pay-to-play rules … Continue Reading

Pay-to-Play Law on Gov. Christie’s Desk Poses Potential Threat to National Parties

A little-noticed sentence in a bill sitting on New Jersey Governor Chris Christie’s desk could, if it becomes law, threaten to curtail the ability of national party committees to raise money from Wall Street and financial industry executives.  The Republican and Democratic Governors Associations, the Republican National Committee, the Democratic National Committee, and the federal … Continue Reading

D.C. Circuit Hears Constitutional Challenge to SEC Pay to Play Rule

A constitutional challenge to the SEC’s “pay to play” rule moved one step closer to resolution today, even as significant hurdles remain in an effort to strike down the rule. The U.S. Court of Appeals for the District of Columbia Circuit heard arguments this morning on an appeal brought by two state political parties challenging … Continue Reading

The SEC & Big Data

In our discussion of the Securities & Exchange Commission’s (SEC) actions over the past year, we described how the SEC is ramping up enforcement of its pay-to-play restrictions.  We also pointed out an acknowledgment by an agency enforcement official that the agency is “actively looking” for violations and that the agency does its own “surveillance.” What kind … Continue Reading

The SEC Pay-to-Play Rule Year in Review

When the history of the Securities & Exchange Commission’s pay-to-play rule is written, 2014 could be the inflection point.  Developments this year suggest two dramatically different paths for the rule in the years to come: either the rule will unravel from court challenges or it will become an increasingly prominent enforcement weapon in the SEC’s … Continue Reading

FINRA Likely to Adopt Pay-to-Play Rule

On November 14, the Financial Industry Regulatory Authority (FINRA) issued a notice asking for comment (by December 15) on its proposal to establish three rules designed to restrict pay-to-play practices.  The three rules include a pay-to-play prohibition (Rule 2390), a disclosure requirement (Rule 2271), and a recordkeeping requirement (Rule 4580).  The rules largely track the … Continue Reading

New Jersey Considering Aggressive Expansion of Pay-to-Play Legislation

New Jersey, already home to some of the most complex and restrictive pay-to-play laws in the nation, is considering an aggressive new expansion of those laws.  A bill under consideration that recently passed through a senate committee would prohibit certain individuals and entities involved in managing state employee retirement funds from making contributions to national, … Continue Reading

Court Dismisses Challenge to SEC Pay to Play Rule (For Now)

In an important decision, the US District Court for the District of Columbia yesterday dismissed a constitutional challenge to the SEC’s “pay to play” rule, which restricts contributions and fundraising by some individuals who are associated with hedge funds, private equity funds, and other registered investment advisers. The Court ruled that the case had been … Continue Reading

SEC Announces Major Fines In First Pay-to-Play Enforcement Case

The Securities & Exchange Commission hit a Philadelphia-area private equity firm today with a major penalty, in the SEC’s first case involving alleged violations of its 2010 “pay-to-play” rules.  More enforcement actions may be coming. The SEC pay-to-play rules were adopted to prevent, among other things, executives of investment firms from making political contributions in … Continue Reading

Contractors Handed 4-Year Ban Under New Jersey Township’s Pay-to-Play Law

Medford, New Jersey recently disqualified five would-be city contractors from receiving municipal contracts until 2017 for allegedly making political contributions in violation of the Township’s pay-to-play ordinance. The ordinance, adopted in 2012, imposes an automatic four-year bar on contracting with a company that contributes to candidates or committees in excess of the law’s per-recipient or … Continue Reading

Connecticut Pay-to-Play Law Does Not Bar Giving to a State Party’s Federal Account

Connecticut’s campaign finance regulator, the State Elections Enforcement Commission (“SEEC”) recently released an important advisory opinion that made clear that a state contractor that is otherwise barred from giving to a state political party under Connecticut’s pay-to-play law can give to the party’s federal account, a point SEEC staff had previously addressed.  However, the state … Continue Reading

Major Criminal Penalties Assessed In New Jersey Pay-to-Play Case

Last spring, we reported that the New Jersey Attorney General charged seven executives and shareholders of Birdsall Services Group, an engineering firm, with participating in a massive pay-to-play scheme.  The scheme allegedly involved a multi-year attempt by company executives and major shareholders to evade state level pay-to-play restrictions by making and then reimbursing political contributions … Continue Reading

DuPage County (Illinois) Board Repeals Self-Imposed Pay-to-Play Restrictions

The Daily Herald reported that last Tuesday suburban Chicago DuPage County repealed previously adopted county-specific pay-to-play rules.  In 2010, DuPage County enacted a county ordinance prohibiting any “officer,” including county board members, from soliciting or accepting campaign contributions in excess of $1,000 from any person or entity seeking an official action or doing business with … Continue Reading

Pay-to-Play: Hidden Factor in Low Contributions to NYC Mayoral Candidates?

The New York Times, in a recent article, called attention to the “paltry” sums contributed by the hedge fund industry to New York City mayoral candidates.  The article explains that hedge fund political contributions are limited—noting that some of the hedge fund industry’s “biggest personalities” are absent from the donor list, while others have contributed as … Continue Reading

How Pay-to-Play Laws Are Changing Elections

Obscure pay-to-play rules are having a big impact on U.S. elections.  In an article in today’s The Hill, we examine how these little understood rules provide institutional fundraising advantages for certain candidates at the expense of others.  We also point out how these laws are changing the operational rules of the road, forcing candidates to … Continue Reading

New York City Pay to Play and Other Campaign Finance Violations Haunt Candidate

During the 2012 election cycle, we cautioned that campaign finance problems can haunt candidates long after the election is over.  Case in point:  As the New York Daily News reports, the New York City Campaign Finance Board recently voted to impose $72,402 in penalties for violations of 15 different campaign finance restrictions, including accepting contributions … Continue Reading
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