SEC to Target Public Investment Influence Peddling

Today’s Pay to Play Law Blog has a piece on the waxing influence of the SEC in regulating the seedy intersection of public investment dollars and campaign cash (click the quoted text for the full article):

As we have recently reported, the SEC has announced its intentions to take a significantly more aggressive regulatory posture with regard to the confluence of campaign contributions and public investing. Just last week, the House Financial Services Committee saw to it that the SEC has the tools for the job when it voted to double the SEC’s budget and awarded the Commission significantly greater regulatory powers.

The Municipal Securities Rulemaking Board (“MSRB”) has also gotten into the act by recently announcing plans to file a rule change with the SEC to revise Rule G-37 to prohibit dealers from engaging in municipal securities business with issuers for two years if they make certain contributions to the political campaigns of officials of issuers. The proposed revision to Rule G-37 would require municipal securities dealers, their muni professionals, and political action committees to disclose the political contributions they make to bond ballot election campaigns.

It will be interesting to see how the class action industrial complex responds.  If private securities suits ride the coattails of these federal enforcement actions, the plaintiffs firms may be inviting additional scrutiny on their own political fundraising activities.

Filed under: Law & Politics, institutional investors, pay-to-play, pension funds, SEC