Appeals Court Upholds SEC Rule Limiting Contributions by Investment Managers

On Tuesday,  a three-judge panel on the Court of Appeals for the DC Circuit upheld a five-year long SEC rule that limits contributions by investment managers, in a case brought forward by the New York Republican State Committee and the Tennessee Republican Party. Jurist, supported by the University of Pittsburgh School of Law writes:

The court said the two parties missed a 60-day deadline for challenging the rule. The parties argued that the so-called “pay-to-play rule” violates the Administrative Procedure Act and the First Amendment.

The pay-to-play rule requires investment advisers to hold off for two years on offering services to government clients if they contribute to the campaign of an official who holds power in influencing the adviser’s hiring. Previously a lower court said it lacked jurisdiction to hear the case.

We filed an amicus brief in the case, arguing that the SEC rule protects the First Amendment rights of public employees by preventing investment advisers from using a portion of their pension money to pay for political spending.

The SEC had been working on this rule since the 1990s, but finalized it after a “pay-to-play” scandal involving the New York City pension system. The challengers to the case claimed that it forced investment advisers to choose between either making political contributions or practicing their chosen profession.

For more information on our amicus brief, click here.

For the complete Jurist posting, click here.

 

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