Header graphic for print
Pay to Play Law Blog Articles, Resources, Insights on Pay to Play Regulations on the Federal and State Level

Category Archives: SEC

Subscribe to SEC RSS Feed

FINRA Quietly Proposes Pay-to-Play Type Rules for Its Broker-Dealer Members

Posted in SEC

By Ben Keane and Stefan Passantino Late last week, the Financial Industry Regulatory Authority (FINRA) quietly posted a new regulatory notice proposing a series of pay-to-play type rules for its broker-dealer members that closely track the pay-to-play provisions set forth by the Securities and Exchange Commission (SEC) in Rule 206(4)-5. FINRA, the self-regulatory organization for… Continue Reading

Federal District Court Rules It Does Not Have Jurisdiction To Hear Challenge to the SEC’s Pay-to-Play Law

Posted in SEC

(But the SEC Provides Some Helpful Guidance Anyway) In a ruling that did not get to the merits of the substantive arguments, a federal court has ruled that it lacks jurisdiction to consider whether the SEC contravened either the US Constitution or the Federal Election Commission’s exclusive turf when it adopted its pay-to-play rule governing… Continue Reading

State Party Committees Challenge Constitutionality of SEC Pay-to-Play Rule 206(4)-5

Posted in SEC

And so it begins… On Friday, the New York and Tennessee state Republican parties, led by the very able Jason Torchinsky, filed a complaint in District of Columbia federal court challenging both the constitutionality and administrative propriety of the SEC’s pay-to-play rule governing investment advisors; Rule 206(4)-5. This is a serious challenge that we all… Continue Reading

MSRB Announces Pay-to-Play Rules are Coming for Municipal Advisors

Posted in First Amendment, SEC

The Municipal Securities Rulemaking Board (“MSRB”) announced this week that it has decided to propose amendments to existing pay-to-play rules governing broker dealers (Rule G-37) to have them also cover municipal advisors. Basically, a “municipal advisor” is simply a technical way to describe a financial advisor who provides her services to local municipalities which have… Continue Reading

SEC Gives Registered Investment Advisers More Time to Bring Themselves Into Compliance with the “Pay-to-Play” Ban on Third-Party Solicitation

Posted in SEC

For more than two years, this blog has been covering the Securities and Exchange Commission’s foray into the world of pay-to-play regulation and the Commission’s attempt to implement federal pay-to-play restrictions for registered investment advisers. The latest chapter in this long and winding saga occurred earlier this month, when the SEC formally extended the compliance date for the third-party solicitation ban imposed by the recently-crafted amendments to Rule 206(4)-5 under the Investment Advisers Act of 1940.

SEC Pay-to-Play Rule Factor in Republican GOP Presidential Primary Fundraising Battle

Posted in SEC

Recent commentary on the SEC’s new pay-to-play rules has generally focused on the lack of certainty to the business community on how these rules will be applied, as well as the administrative difficulties that will likely arise as the rule first goes into effect. RealClearPolitics has an interesting new take on the regulations, which focuses on how this could impact the 2012 Republican Presidential Primary.

Additional Settlements in New York Pension Fund Investigation

Posted in New York, SEC

New York State Attorney General and Governor-Elect Andrew Cuomo has announced additional settlements in his investigation of “pay-to-play” practices and conflicts of interest at public pension funds. Veteran Albany lobbyist Patricia Lynch Associates, Inc. will pay a $500,000 fine and be banned for a period of five years from appearing before the State Comptroller’s Office. The State Comptroller is the sole trustee of New York State’s approximately $133 billion Common Retirement Fund (CRF).

MSRB Takes on Pay-to-Play Again – This Time in the Muni Advisory World

Posted in SEC

The MSRB is at it again. It is wasting no time putting rules in place to address pay-to-play practices for the advisory community. MSRB called a special meeting to address this issue, among others, on the heels of the 2010 Dodd-Frank Act, which expanded MSRB’s jurisdiction to include the regulation of municipal advisors, in addition to dealers, which MSRB has regulated since 1975.

Public Pensions are Not for Sale in California – Placement Agents Must Register as Lobbyists Under New Law

Posted in SEC

Public pensions are not for sale was the message surrounding Assembly Bill 1743, signed into law by Governor Arnold Schwarzenegger on September 30. The bill was sponsored by the California Public Employees’ Retirement System (CalPERS), state Controller John Chiang and Treasurer Bill Lockyer, both ex officio members of the pension fund’s Board. Chiang and Lockyer have touted AB 1743 as legislation that would ensure transparency and promote merit based investment decisions.

SEC’s Placement Agent Probe Continues

Posted in Kentucky, SEC

Since the SEC passed its pay-to-play rule in June, the feds have clearly been looking for a target to “make an example out of” as a way of showing they are serious about pay-to-play. A sacrificial lamb appears to have been found. Recently, the SEC opened an “informal inquiry” into the Kentucky Retirement Systems’ (“KRS’”) use of placement agents as a result of one of KRS’s own internal audits. KRS oversees a $12.5 billion fund for state and county retirees.

MSRB Scrutinizes PACs and the Potential for Circumvention of Rule G-37

Posted in SEC

Yesterday, the MSRB filed a proposed rule change with the SEC consisting of interpretive guidance in connection with Rule G-37 and the use of political action committees (“PACs”). The MSRB said it is reviewing the pay-to-play rules because recent consolidation in the financial industry has placed bond dealers under the control of banks, bank holding companies and other companies that have PACs.

No More Delay? SEC to Discuss Pay to Play on June 30

Posted in SEC

After almost a year (and countless scandals with related enforcement actions later), it appears the SEC will issue its much loved, hated and debated pay-to-play rule. The SEC has announced the subject matter to be discussed at its open meeting on June 30, 2010: “The Commission will consider whether to adopt a new rule and… Continue Reading

SEC Warns Firms on Muni Pay-to-Play Rules

Posted in SEC

The SEC has given notice that it intends to take a very active role with respect to pay-to-play issues in the securities markets. It recently issued a report warning firms that municipal securities rules prohibiting pay-to-play apply to affiliated financial professionals, not just a firm’s employees.
The SEC report was issued in connection with an Enforcement Division inquiry into whether JP Morgan Securities Inc. (JPMSI) violated MSRB Rule G-37.