Burr & Forman

07.26.2017   |   Articles / Publications

Law360: Pay-To-Play Rules are Here to Stay

In an article published by Law360 on July 25, 2017, Tom Potter offers insight to the Sixth Circuit decision to reject the latest constitutional challenge of the U.S. Securities and Exchange Commission to expand the reach of rules aimed at preventing pay-to-play practices by municipal securities dealers to include investment advisers, municipal advisers and broker-dealers. Potter wrote, “Instead of clear discussion of how best to balance concerns of undue influence in public hiring against constitutionally protected political speech, the issue was delegated by Congress to the administrative state…; was buried in two layers of notice-and-comment rulemaking before the agencies advocating the restriction in the first place; and escaped judicial review with respect to the newer rules on non-substantive grounds.” He emphasizes, “The new suite of pay-to-play rules are here to stay – at least until a court reviews an SEC action upholding their enforcement against an investment professional who has raised and preserved the constitutional arguments against them.”

For the full article, subscribers to Law360 may click here.

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