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Administration December 9, 2000
Advisors That Pay Can't "Play" Under SEC Proposal
September 12, 2000 (PLANSPONSOR.com) - Investment
advisory firms will likely have to "look up" the corporate
ladder for individuals that may have made political
contributions.
Reported by Nevin E. Adams
Those contributions could bar the firm from doing business with state or local pension funds under a pending proposal, according to SEC Deputy General Counsel Meyer Eisenberg.
The SEC proposal is similar to an existing rule that applies to municipal underwriting firms. So-called “pay-to-play” occurs when public officials select Wall Street and other firms to manage state or local pension funds on the basis of political contributions rather than competence.
Eisenberg also told attendees at the National Regulatory Services Fall 2000 Investment Adviser & Broker-Dealer Compliance Conference that the SEC will consider investment advisor concerns before adopting the final rule, according to The Wall Street Journal.
Julie Allecta, a partner at Paul Hasting Janofsky & Walker in San Francisco, which provides legal representation to investment companies and advisers, predicted that firms that provide investment advisory services will need to develop questionnaires for employees to record their contributions to political campaigns, and must develop internal guidelines for monitoring and tracking such contributions, according to the Journal.