Tuesday, September 4, 2012
The SEC issued a Risk Alert regarding practices that raise concerns about firms' compliance with a Municipal Securities Rulemaking Board rule that limits political contributions by municipal securities professionals to campaigns of public officials of issuers with whom they are doing or seek to do business (so-called “pay to play” practices). These concerns include:
- Compliance with the rule’s ban on doing business with a municipal issuer within two years of a political contribution to officials of the issuer by any of the firm’s municipal finance professionals
- Possible recordkeeping violations
- Failure to file accurate and complete required forms with regulators regarding political contributions
- Inadequate supervision
The Risk Alert also identifies practices that examiners have seen some firms use to comply with applicable federal, state, and local rules on contributions.