Common Cause Submits Comment on SEC Rule

• by Common Cause of New York

NEW YORK, NY (10/06/2009)(readMedia)-- Common Cause today submitted comments in support of the Securities and Exchange Commission's "Proposed Rule Regarding Political Contributions by Certain Investment Advisers," which prohibits certain pay-to-play practices by government officials investing private funds. The rule, which is designed to end pay-to-play arrangements effecting public investment funds, such as public pension funds, by prohibiting investment advisors from advising fund officials for 2 years after they make campaign donations to elected officials who manage the funds or appoint or influence those who do, and would prohibit the use of "placement agents" and prohibit bundling by investment advisors, as well as require registered advisers to keep records of campaign donations.

"The proposed rule addresses a real problem that we have, unfortunately, directly experienced here in New York, said Susan Lerner, Executive Director of Common Cause/New York."The pay-to-play scandals involving public pension funds here in New York have had ripple effects across the nation. We commend the SEC for adopting many of the reforms which have already been adopted here in New York and applying them uniformly throughout the country."

The comment, submitted jointly by Common Cause and its state chapters in New York, California, Colorado, New Mexico, Oregon, and Pennsylvania, points out that "pay to play has not only the potential to compromise an investment adviser's ethical and legal duties under the Investment Advisers Act of 1940, but in several high profile cases across the nation, has already done so, negatively impacting the public perception of government decision making and, in some cases, costing the taxpayer millions of dollars and placing billions of dollars in pension funds at risk."

Common Cause/NY is a non-partisan citizen's lobby whose goal is open and accountable government.

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