August 13, 2014 •
State Republican Parties Challenge SEC Pay-to-Play Rule
The Republican parties of New York and Tennessee have filed suit in U.S. District Court for the District of Columbia challenging Securities and Exchange Commission (SEC) Rule 206(4)-5. The plaintiffs allege the rule, which imposes restrictions upon investment advisors and their covered associates making contributions to officials of state and local government entities, violates the freedom of speech protections of the First Amendment.
The suit also takes the position that the SEC does not have the authority to regulate campaign contributions.
If struck down, the elimination of the rule would make it easier for any state governor making a run for president to raise money from the financial sector.
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