[JURIST] A three-judge panel on the Court of Appeals for the DC Circuit [official website] affirmed [opinion, PDF] a lower court’s decision and ruled in favor of the Securities and Exchange Commission (SEC) [official website] on Tuesday, upholding a five-year long rule that limits how much investment managers can contribute to political campaigns. The case was originally brought by the New York Republican State Committee and the Tennessee Republican Party [official websites] against the SEC in 2014. The court said the two parties missed a 60-day deadline for challenging the rule. The parties argued that the so-called “pay-to-play rule” violates the Administrative Procedure Act and the First Amendment [backgrounders]. The pay-to-play rule requires investment advisers to hold off for two years on offering services to government clients if they contribute to the campaign of an official who holds power in influencing the adviser’s hiring. Previously a lower court said it lacked jurisdiction to hear the case.
The SEC has been the center of attention for several legal happenings the past few years, particularly those concerning insider trading. Earlier this month the SEC announced [JURIST report] that a former software executive at SAP SE (SAP), Vincente E. Garcia, agreed to settle charges filed against him for violating the Foreign Corrupt Practices Act (FCPA) [legislative materials] by bribing Panamanian government officials to secure software license deals. Also this month, the SEC indicted [JURIST report] an international web of hackers and traders who stole information from press releases prior to publication and traded on said information, making over $100 million in illegal profits. In April the US Supreme Court denied [JURIST report] an appeal brought by Rajat Gupta, the former director of the Goldman Sachs Group Inc, for his 2012 insider trading conviction. Gupta was convicted [JURIST report] on three counts of securities fraud and one count of conspiracy to commit securities fraud in June 2012.