In a recent article on Venable LLP's website, It Doesn't Pay to "Pay to Play", several Venable attorneys write about Investment Advisers Act Rule 206(4)-5.
Rule 206(4)-5 was adopted to prevent "pay-to-play" activity, in which "investment advisers may seek to influence the award of investment advisory services from public pension funds and other government entities in return for political contributions or fund raising." Rule 206(4)-5 prohibits certain employees of investment advisers from making political contributions. As the Venable attorneys write, "failure to comply, even if inadvertent, may subject an adviser to significant forfeitures, potential penalties and other sanctions."
Posted by Kyle Petit, Associate Editor, Wealth Strategies Journal.
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