SEC Curbs "Pay to Play" Practices by Investment Advisers

The Securities and Exchange Commission (“SEC”) voted unanimously on June 30, 2010 to approve new rules effectively banning the influence of so-called “pay to play” practices by investment advisers, significantly curtailing their ability to make political contributions to elected officials who have a decision-making role over public pension fund assets. The new rule follows a number of recent scandals, including one involving the New York State Common Retirement Fund, in which investment advisers allegedly made campaign contributions to certain politicians with the intention of influencing their selection of state pension fund asset managers.