The U.S. Securities and Exchange Commission (“SEC”) last week announced settlements with four investment advisory firms regarding alleged violations of the SEC’s pay-to-play rule, illustrating that federal regulators continue to aggressively pursue such cases. The rule at issue, Rule 206(4)-5 (“the Rule”), prohibits investment advisers from, among other things, receiving compensation from certain government entities
SEC
In Major Blow To Its Opponents, SEC Pay-to-Play Rule Survives D.C. Circuit Challenge
The U.S. Court of Appeals for the D.C. Circuit yesterday issued a long-awaited opinion upholding, on the merits, a recent update to the SEC’s pay-to-play rule. While the case involved only a narrow piece of the rule, the decision’s logic is worded more broadly and could apply to the SEC rule as a whole, making…
Investment Adviser Hit With $100K SEC Fine, a Reminder that Public Universities are Covered by Pay-to-Play Rule
In December, the Securities and Exchange Commission (“SEC”) fined an investment adviser $100,000 for violating the SEC’s pay-to-play rule. The SEC’s rule effectively prohibits investment adviser executives and other “covered associates” of an investment adviser from making political contributions in excess of de minimis amounts ($350 per election if the contributor is eligible to vote…
Political Law Potpourri—The Consolidated Appropriations Act of 2018
While the din over a possible government shutdown dominated the headlines, political law played a supporting role in the recently enacted Consolidated Appropriations Act (Pub. L. No. 115-141). The content and omissions of the so-called “Omnibus” spending bill will be of interest to political actors in all sectors, but particularly those operating nonprofit…
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)…
Covington Updates Investigations Manual for House and Senate Chiefs of Staff
Covington today released an updated version of its manual for Chiefs of Staff to Members of Congress concerning best practices for responding to government investigations of Members and their staff. Titled “A How-To Guide for Chiefs of Staff,” the manual describes how government investigations unfold and the steps that Chiefs of Staff need to take…
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…
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…
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…
Congressional Spending Bill Shuts Down Key Goals of Campaign Finance Reform Community
A major spending bill posted late last night by Congressional leaders contains provisions shooting down two key initiatives of the campaign finance reform community.
Stymied by a Federal Election Commission that has increasingly struggled to find consensus, campaign finance activists in recent years have turned their attention to other federal regulators, pressing those regulators to …