SEC

The Securities and Exchange Commission (SEC) this week issued a cease-and-desist order that demonstrates the SEC pay-to-play rule’s expansiveness and the SEC’s readiness to enforce it to the letter, even when it is virtually impossible that a political contribution could have influenced a government entity’s investment decision.

In this alert

Continue Reading SEC Enforcement Order Highlights Far Reach of Pay-to-Play Restrictions

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

Continue Reading SEC Commissioner Says It’s “Past Time” To Reform Overly “Blunt” Pay-to-Play Rule

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
Continue Reading In Major Blow To Its Opponents, SEC Pay-to-Play Rule Survives D.C. Circuit Challenge

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
Continue Reading Investment Adviser Hit With $100K SEC Fine, a Reminder that Public Universities are Covered by Pay-to-Play Rule

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,
Continue Reading Political Law Potpourri—The Consolidated Appropriations Act of 2018

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

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
Continue Reading Covington Updates Investigations Manual for House and Senate Chiefs of Staff

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

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

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