Overview
Steptoe of counsel, Jason Abel, who previously served as chief counsel for the US Senate Committee on Rules and Administration, was quoted by NBC News in an article titled “‘Competitive Disadvantage’?: Pay-to-Play Rules and the 2016 Stakes.” The article, published January 15, discusses the potential challenge federal pay-to-play rules pose for donors in the financial services industry wishing to contribute to the 2016 presidential campaign of any sitting governors, including New Jersey Governor Chris Christie.
The federal pay-to-play rule for investment advisers – SEC Rule 206(4)-5 -- restricts the ability of investment advisers to do business with a particular jurisdiction for two years if certain covered associates of the investment adviser contribute to covered officials, which include those who have the ability to influence the selection of investment advisers.
Mr. Abel says those in the financial services industry must be aware of the risks in contributing to sitting governors, such as Governor Christie, because of the cost of violations. “The penalties can range into the tens of millions of dollars, loss of business, and disgorgement (forfeit of revenues)," he says. Mr. Abel adds that the rule is not clear in its application to certain Super PACs, which may lead to additional risks for those seeking to contribute.
The full article can be read at NBC News.