from Wolf Street:
Here’s a scenario to chew on: An investment firm makes a campaign contribution to a city mayor. Later, the mayor appoints members to the city’s pension board. The pension board decides to hire the aforementioned investment firm to handle the pension fund’s investments.
Does something seem fishy about that situation?
The SEC says yes, and they have rules in place to prevent those “pay-to-play” scenarios.
But a recent lawsuit says no: investment managers should be able to donate money to whichever politicians they choose, even if those donations could present a conflict of interest down the line. The lawsuit, filed last week by Republican committees from New York and Tennessee against the SEC, wants the court to affirm that political donations are free speech—and, by extension, current SEC pay-to-play rules are unconstitutional.
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