Wednesday, August 31, 2011

Search Firms Know the Best Recruiting Techniques

In World War II, there was a need for Assessment Centers to identify those people among fresh recruits who were capable of handling critical jobs and heavy responsibilities. In today?s scenario, similar recruiting techniques are used by search firms to identify the best candidates for their clients? requirements. Just as finding the right people to [...]

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Trenton Update (To the Tune of "Suspicious Minds")

We brought Trenton to your attention here just a few days ago to highlight the potential pitfalls of “ban first, inquire later” pay-to-play enforcement. At the time, we observed that Trenton Mayor Tony Mack’s effort to rescind a pay-to-play ban was “procedurally murky”. The Trentonian apparently agreed and reported on the issue complete with a YouTube embed of Elvis singing “Suspicious Minds” as a musical accompaniment to its call that “[t]here is no reason for the City of Trenton to continue with another embarrassing decision made by a city council that lacks backbone.”


This call precipitated two immediate effects. First, it instilled great personal shame in myself for having failed to this point to accompany my entries with Elvis embeds. I resolve to remedy that.


Second, public pressure such as that brought to bear by The Trentonian has caused the law firm in question, Cooper Levenson, to terminate its contract with the city over the issue. A copy of the termination letter can be found here. Whether this result was warranted or appropriate, one should bear this little tune in mind before contributing in Trenton.


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Ambac & Others Agree to Pay $33M to Settle Fraud Allegations Surrounding Bond/Insurance Litigation

Ambac Financial Group Inc., as well as several of its banking underwriters and insurers, has agreed to pay a total of $33M in order to settle claims of investment fraud. According to investors who experienced significant financial loss, the parties involved hid risks from investors about the mortgage debt it guaranteed. The primary claimants in [...]

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ClientSpeak - GLI Delivers!

I find the team at Grimes Legal, Inc. to be professional, responsive and sensitive to the needs of our law firm. Nancy Grimes has been extremely creative and diligent in helping our firm find the right matches each and every time we?ve called. We appreciate the opportunity to work with consummate professionals like those at [...]

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Leased Instruments Delivered with only a Small Down Payment

World Prime Banks TOP 50 PRIME WORLD BANKS BANK NAME COUNTRY 1.    BNP Paribas SA, Paris FRANCE 2.    The Royal Bank of Scotland Group PLC, Edinburgh UK 3.    Credit Agricole SA, Paris FRANCE 4.    Barclays PLC, London UK 5.    Deutsche Bank AG, Frankfurt am Main GERMANY 6.    Industrial & Commercial Bank of China Limited, Beijing [...]

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New York City area loans available

Our lender has an appetite for New York City area loan requests! Anything with a decent completed value will be considered. Opportunities, hard money, refinances, refurbishment, construction, expansions, and acquisitions are all fair game. Below are other often overlooked market niches that are closing. Look to your existing clients or start a marketing program to [...]

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Life Insurance Sold to Church Members Alleged Scam by Agents

In a June 17, 2011, article written by Darla Mercado for InvestmentNews.com, she writes that six life insurance agents claim that Aviva Life and Annuity Co. had consented to the offer of insurance coverage to some 119 churchgoers in Los Angeles. It was reported that insurance agents, Kazimir Patelski, Glenda Smith-Lee, Napoleon B. Kinney, Cheralynne Bridgewater, Candice [...]

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Have you used Mark E. Imbertson as Your Broker?

Mark E. Imbertson, a former Merrill Lynch stock broker in West Palm Beach, Florida, was recently terminated for alleged multiple customer complaints. Mark Imbertson has received 17 reported customer disputes on his employment record, according to FINRA broker check. Many of the complaints allegedly relate to unauthorized trading and short selling without customer approval. If you were a [...]

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Tuesday, August 30, 2011

Friday News (06.10.2011)

Despite the Texas Governor’s veto in late May of a bill that would have closed a major sales tax loophole for online retailers like Amazon.com, the Texas House of Representatives fires back by refusing to take the issue off the table. Another Austin-based company is about to go public.  That makes six (6) Austin companies to file for an IPO this year. Scary NY Times blog post on why Timothy Geithner, U.S. Treasury Secretary, may be operating on some misguided assumptions. The Economist suggests that

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Costs Associated with Investing in Mutual Funds

If you?ve invested in mutual funds, you should know that taxes can affect your investment, sometimes significantly reducing your net returns. To completely avoid federal taxes, consider investments such as tax free municipal bonds. Also be aware that some mutual fund investments are more tax efficient than others. Below is some basic information regarding mutual [...]

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Where Were the Lawyers?

FINRA CEO Says Brokers Must ?Push and Pull? for Private Placement Information

Often, investment advisors, stockbrokers and brokerages who unsuitably push Reg. D Private Placements on investors claim that any financial losses investors subsequently experience occur despite their due diligence. However, these private investments pay high fees that can induce some financial professionals to look the other way, focusing on the fifteen percent fee rather than the [...]

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Principal Protected Notes, Lehman Brothers and UBS Financial Services Arbitrations

A recent class action suit against Lehman Brothers as well as an enforcement proceeding against UBS Financial Services by New Hampshire has encouraged investors to hire investment recovery litigators and pursue claims against firms selling Lehman Brothers principal protected notes in an attempt to recoup their financial losses. According to New Hampshire?s claim, UBS engaged [...]

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Trenton Update (To the Tune of "Suspicious Minds")

We brought Trenton to your attention here just a few days ago to highlight the potential pitfalls of “ban first, inquire later” pay-to-play enforcement. At the time, we observed that Trenton Mayor Tony Mack’s effort to rescind a pay-to-play ban was “procedurally murky”. The Trentonian apparently agreed and reported on the issue complete with a YouTube embed of Elvis singing “Suspicious Minds” as a musical accompaniment to its call that “[t]here is no reason for the City of Trenton to continue with another embarrassing decision made by a city council that lacks backbone.”


This call precipitated two immediate effects. First, it instilled great personal shame in myself for having failed to this point to accompany my entries with Elvis embeds. I resolve to remedy that.


Second, public pressure such as that brought to bear by The Trentonian has caused the law firm in question, Cooper Levenson, to terminate its contract with the city over the issue. A copy of the termination letter can be found here. Whether this result was warranted or appropriate, one should bear this little tune in mind before contributing in Trenton.


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BOYNTON BEACH MAN CHARGED WITH MAIL FRAUD IN ?PONZI? SCHEME

It was anounced on Florida’s Office of Financial Regulation, that on June 3, 2011 there was a filing of a Criminal Information against defendant Anthony F. Cutaia, 65, of Boynton Beach, Florida.  Cutaia made his initial appearance in federal court, and was released on a personal surety bond.     The news-release states that the Information charges Cutaia [...]

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Did Wall Street Bankers Commit CDO Fraud?

In 2009, the Securities and Exchange Commission (SEC) began a civil fraud investigation of over a dozen banking firms that traded and sold mortgage-backed collateralized debt obligations (CDOs). This investigation has engendered subsequent probes into the behavior of Wall Street firms. Did Wall Street bankers defraud investors by selling them CDOs in order to make [...]

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Monday, August 29, 2011

Trenton Update (To the Tune of "Suspicious Minds")

We brought Trenton to your attention here just a few days ago to highlight the potential pitfalls of “ban first, inquire later” pay-to-play enforcement. At the time, we observed that Trenton Mayor Tony Mack’s effort to rescind a pay-to-play ban was “procedurally murky”. The Trentonian apparently agreed and reported on the issue complete with a YouTube embed of Elvis singing “Suspicious Minds” as a musical accompaniment to its call that “[t]here is no reason for the City of Trenton to continue with another embarrassing decision made by a city council that lacks backbone.”


This call precipitated two immediate effects. First, it instilled great personal shame in myself for having failed to this point to accompany my entries with Elvis embeds. I resolve to remedy that.


Second, public pressure such as that brought to bear by The Trentonian has caused the law firm in question, Cooper Levenson, to terminate its contract with the city over the issue. A copy of the termination letter can be found here. Whether this result was warranted or appropriate, one should bear this little tune in mind before contributing in Trenton.


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The Record 2509 2008 U.S. Partner Laterals

Is It Really Too Late? Fraud, Statutes of Limitations & Recovering Investment Losses

Although it?s been three years since financial misconduct on Wall Street rocked the nation, investors still have opportunity to recoup some or all of their financial loss. If you suffered financial loss during the recent crisis, your broker, brokerage or financial advisor may be legally responsible for that loss. A variety of legal actions can [...]

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Is It Really Too Late? Fraud, Statutes of Limitations & Recovering Investment Losses

Although it?s been three years since financial misconduct on Wall Street rocked the nation, investors still have opportunity to recoup some or all of their financial loss. If you suffered financial loss during the recent crisis, your broker, brokerage or financial advisor may be legally responsible for that loss. A variety of legal actions can [...]

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FINRA CEO Says Brokers Must ?Push and Pull? for Private Placement Information

Often, investment advisors, stockbrokers and brokerages who unsuitably push Reg. D Private Placements on investors claim that any financial losses investors subsequently experience occur despite their due diligence. However, these private investments pay high fees that can induce some financial professionals to look the other way, focusing on the fifteen percent fee rather than the [...]

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Second Quarter 2010 Report

Voting While Subject to a Conflict of Interest is not "Free Speech"

A unanimous United States Supreme Court today confirmed what anyone not sitting on the Nevada Supreme Court would be presumed already to know: legislators do not have a free speech right to vote on a matter they would otherwise be prohibited from recording under a state’s code of ethics. While this ruling would not appear, on the surface, to be controversial, a careful read of the opinion reveals that the legislator in question, as well as the Nevada Supreme Court, missed an opportunity to challenge the extended scope of the code in a way that would have had direct relevance to the regulated pay-to-play community.


In this case, Nevada Commission on Ethics v. Carrigan, Sparks, Nevada City Councilmember Michael Carrigan voted to approve a hotel/casino deal that would have directly benefitted his long-time friend and campaign manager. Even in Nevada, that was considered a disqualifying conflict of interest under state law. Nonetheless, Carrigan took a shot at Frontier Justice and tried to argue that any law impairing his right to vote amounted to a denial of his constitutionally guaranteed right to free speech. The Nevada Supreme Court went along and dismissed the charges against Carrigan.

Because the Nevada court had ruled in such a broad fashion – virtually guaranteeing legislators the constitutional right to vote on a matter notwithstanding any state-imposed restrictions – it was relatively easy for outside observers to characterize the case as a “decision, [that] if upheld, threatened ethics laws nationwide”. The issue, thus framed, became relatively easy even for the chronically fractured Supreme Court.


Where opportunity for clarity was lost, unfortunately, was with respect to the permissible scope of ethics and pay-to-play laws in seeking to regulate behavior based on the conduct of others. One of the hallmarks of modern pay-to-play legislation is the need to prevent “circumvention” by casting ever-widening nets of relationships for which the regulated community is responsible for. This blog has bemoaned the compliance challenges posed by unreasonably broad compliance circles (such as http://www.paytoplaylawblog.com/2010/08/articles/alaska/alaska-gets-in-on-the...">here and here) and the issue has been taken up by the United States Second Court of Appeals.


In the present case, Nevada’s law prohibited legislators from voting on matters which might be impaired by the legislator’s “commitment” to members of his/her family, blood relatives, those related by adoption or marriage, employees, members of the household, and those with “substantial and continuing” business relationships with the officer. As if that weren’t vague enough, Carrigan actually got zapped on an even broader, and more vague, clause 281A.420(8)(e) capturing commitments or relationships “substantially similar” to those defined above. Such vague legislating would appear to be ripe for constitutional challenge. Unfortunately, as the U.S. Supreme Court gleefully pointed out in the last section of its opinion, Carrigan neglected to raise the issue in his petition for certiorari and the Court saw “no reason to sidestep” the rule that omitted arguments are considered waived.


It would thus appear that an opportunity to provide guidance, and pre-empt my whining about overbroad pay-to-play statutes, has been lost.

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Sunday, August 28, 2011

LEASED BANK GUARANTEE/SBLC VIA EUROCLEAR

? 3.0% DOWN as Initial Deposit with full payment due in 10 banking days ? Allows 10 banking days to pay for the instrument (most lenders require 48-72 hours) ? BG posted on Euroclear for easy verification ? Full access/blocking codes, ISIN etc. provided to client after initial deposit is paid. ? Corporate Undertaking to [...]

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Atlanta Takes Another Shot at Procurement Restriction

Fulton County, Georgia – home county to the City of Atlanta - is poised once again to take up an ordinance designed to prohibit any corporation, officer, agent or individual who makes relevant campaign contributions or gifts from seeking county contracts. Just yesterday, the Fulton County Commission announced an agenda item for its August 17, 2011 recess meeting. Deep on page 12 of that agenda is a single line item styled:


Request approval of a Resolution amending the Fulton County Code of Laws regarding campaign contributions from entities doing business with, or seeking to do business with, Fulton County.


The resolution to be taken up, proposed by Commissioner Emma Darnell, closely mirrors a pay-to-play contract restriction proposed two years ago for the City of Atlanta by Common Cause Georgia.  In its current form, the proposed resolution provides that no corporation, entity, or individual will have the right to bid for, or hold, a county contract if it has either made a campaign contribution of $500 or more to a County Commissioner or has provided any direct or indirect gift or contribution to a County Commissioner or any Fulton County employee.

For the purposes of determining whether a person has reached the $500 threshold, Commissioner Darnell’s resolution proposes aggregating all contributions or gifts made by an individual, their parents, siblings, spouse, or children as well as by any company that the individual controls or holds a 10% stock interest in. With respect to company contributions and gifts, the proposed resolution would aggregate all contributions or benefits conferred by any “officers, directors, partners, members, or salaried employees of the entity, and of any affiliated or subsidiary entities.”


Yes, you read that right. Under the proposed resolution, a company such as Delta Air Lines would theoretically be debarred from contracting with Fulton County (they have an airport in Atlanta, don’t they?) if even one of its salaried employees pays for a birthday cake for a next door neighbor who just happens to be a Fulton County employee. (Transparency Note: Delta Air Lines is a client of our firm, but this example could just as easily apply to any corporation having any employee who inadvertently makes a $500 campaign contribution or any gift to a County Commissioner or county employee).


As this blog has noted before, well-meaning and good-intentioned efforts to restrict back room dealing almost always get hoisted upon the petard of the broad language necessary to prevent circumvention but predictably results in negative, unintended consequences. The Law of Good Intentions almost always loses out to the  Law of Unintended Consequences.  Under this proposal, compliance costs will skyrocket, as will the likelihood of unnecessary and inefficient bid protest litigation due to inadvertent violations. In light of these potential effects, simple disclosure of all campaign and gift activity in the contracting process strikes me as the much more sensible approach.


I also have concerns that such restrictions will needlessly limit campaign activity and chill political speech inside of Fulton County. The words I wrote two years ago here still ring true to my ear:


While few would argue that the procurement process in Atlanta doesn't need more sunshine, the Common Cause proposal appears to go a few steps to far. Most troublesome is the proposal to prohibit persons who make contributions of over [$500] from bidding on any … contracts for the next year, as the prohibition applies even if the contract in question was not in existence at the time of the contribution. Restricting contribution amounts in this manner would undoubtedly chill the making of political contributions for City of Atlanta elections altogether, as any person or entity with any potential interest in any City contract in the future could not make contributions without the fear of being locked out of all future business. This is the sort of broad restriction that has proven to be problematic in jurisdictions such as Colorado. Similarly problematic is the apparent willingness to consider contributions by spouses and children of contributors in making prohibition determinations. Again, Colorado should serve as a cautionary tale here.


Needless to say, Common Cause Georgia, and many others, do not share my concerns. Whether Fulton County’s proposed resolution passes tomorrow or not, however, the waves of “restriction as reform” continue to hit the beach.

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Turning the Corner on the Big Roller Coaster Ride of BigLaw

Smooth Sailing in 2011

Did Wall Street Bankers Commit CDO Fraud?

In 2009, the Securities and Exchange Commission (SEC) began a civil fraud investigation of over a dozen banking firms that traded and sold mortgage-backed collateralized debt obligations (CDOs). This investigation has engendered subsequent probes into the behavior of Wall Street firms. Did Wall Street bankers defraud investors by selling them CDOs in order to make [...]

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Principal Protected Notes, Lehman Brothers and UBS Financial Services Arbitrations

A recent class action suit against Lehman Brothers as well as an enforcement proceeding against UBS Financial Services by New Hampshire has encouraged investors to hire investment recovery litigators and pursue claims against firms selling Lehman Brothers principal protected notes in an attempt to recoup their financial losses. According to New Hampshire?s claim, UBS engaged [...]

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Saturday, August 27, 2011

President Obama (Again) Looks to Impose a Form of Federal Pay-to-Play Disclosure on Federal Contractors

Last year, we reported here and here that certain elements of the Executive Branch have been looking into ways to impose federal pay-to-play restrictions and disclosure requirements on those doing business with the federal government. Today, the White House confirmed that President Obama is strongly contemplating issuing an executive order designed to impose pay-to-play disclosures on federal contractors in a big way.


As announced by the White House, the President is http://www.washingtonpost.com/politics/obama-weighs-disclosure-order-for-cont...">examining an order that would mandate that all federal contractors disclose any and all contributions to groups that engage in political activities. This is contemplated, the White House says, in direct response to the Supreme Court’s opinion in Citizens United v. FEC (discussed here) and Congress’ failure to enact the DISCLOSE Act (discussed here).

To learn more about what, exactly, the President has in mind, one needed to be on board Air Force One (headed to California on a Presidential and DNC fundraising swing, ironically enough) to hear White House Press Secretary Jay Carney say the following:


Q Jay, there was -- there were reports this morning that the administration is considering an executive order requiring companies seeking government contracts to disclose their contributions to groups that under current law would be secret. Is that correct?


MR. CARNEY: Well, what I can tell you is there is a draft -- there’s a process, and it’s in the -- it’s part of a process. There’s a draft, and the particular specifics of that executive order could change over time, so I can’t talk about the specifics. What I can tell you is the President is committed to improving our federal contracting system, making it more transparent and more accountable. He believes that American taxpayers deserve that, and that's what he intends to pursue through this executive order.


Q Is there any political goals behind this?


MR. CARNEY: Quite the contrary. He believes very strongly that taxpayers deserve to know whether or not the contractors that their money is going to is being used -- how they're spending their money, and how -- whether they're -- how they're spending in terms of political campaigns. And his goal is transparency and accountability. That's the responsible thing to do when you’re handling taxpayer dollars.


Q Is he likely to go ahead with the executive order? Or is there another way to accomplish it?


MR. CARNEY: I can’t -- there’s an executive order in the draft process. I can’t give you any specifics on it because the specifics could change. That's the nature of the process.


Q Jay, on a trip like this that combines presidential events with campaign events, can you talk about how it’s funded? For example, there are no presidential events in Los Angeles. Is that entire part of the trip funded through the campaign?


MR. CARNEY: Ari, you know the -- when there is travel like this that involves official travel and also political travel, this administration very diligently follows all the same rules that the Bush administration did. And as far as the specifics on how that breaks down, I’ll have to get back to you. I don't have that. But we’re very careful about making sure that all those rules are followed.


“Diligently [following] all the same rules that the Bush administration did” and breaking substantial new ground all at the same time. That’s a pretty impressive two-step.


One immediate challenge comes to mind: if all federal contractors and bidders are required to disclose their contributions to groups of any kind that engage in political or issue advocacy, how does one prevent federal contract officers from demonstrating bias against bidders supporting unpopular views or the party out of power? This is a decent enough effort at transparency that strikes me as having the potential to trod all over our constitutional rights to free expression and freedom of association. To quote David Wenhold, immediate past president of the American League of Lobbyists, “Sunlight is good, but sometimes too much sunshine can cause cancer.”


This is definitely one to stay tuned to.

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There is DEFINITELY a New Sheriff in Albany - Governor Cuomo Proposes Sweeping Ethics and Pay-to-Play Reform

Having apparently abandoned all hope of reforming New York’s Congressional delegation (and with a bipartisan ethics All-Star team including Congressmen Anthony Weiner (D-NY), Christopher Lee (R-NY), Eric Massa (D-NY), Charlie Rangel (D-NY) and Vito Fosella (R-NY)), Governor Cuomo has concluded that it's time to focus on New York State ethics and disclosure.


This week, Governor Cuomo announced that he, Senate Majority Leader Dean Skelos and Assembly Speaker Sheldon Silver had reached a three-way agreement on a substantial ethics reform package. Initially, and possibly more appropriately, named the “Clean Up Albany Act” in early press releases, the “Public Integrity Reform Act of 2011” proposes sweeping changes across a number of ethical disciplines. The proposed changes include the following:

Financial Disclosures: Financial disclosure statements filed with the new Joint Commission on Public Ethics from elected officials will now be posted on the internet and the prac tice of redacting the monetary values and amounts reported by the filer will be ended. The Act also includes greater and more precise disclosure of financial information by expanding the categories of value used by reporting individuals to disclose the dollar amounts in their financial disclosure statements. The Act requires disclosure of the reporting individual’s and his or her firm’s outside clients and customers doing business with, receiving grants or contracts from, seeking legislation or resolutions from, or involved in cases or proceedings before the State as well as such clients brought to the firm by the public official.


In Albany, this is a controversial measure as a number of legislators – who will now be required – effective July 1, 2012 and upon potential penalty of $40,000 for failing to do so – to disclose the names of “outside clients and customers” – are attorneys who do not wish to disclose the identities of their clients. As one would expect, backlash from legal members of the Assembly was immediate and vociferous.


Increased Access to Who is Appearing Before the State and Why: The Act establishes a new database of any individual or firm that appears in a representative capacity before any state governmental entity.


Additional Disclosures for Registered Lobbyists: The bill expands lobbying disclosure requirements, including the disclosure by lobbyists of any "reportable business relationships" of more than $1,000 with public officials. It also expands the definition of lobbying to include advocacy to affect the "introduction" of legislation or resolutions, a change that will help to ensure that all relevant lobbying activities are regulated by the new Joint Commission.


A New Joint Commission on Public Ethics: This is potentially the most significant development of the newly proposed legislation. The new Joint Commission on Public Ethics will replace the existing Commission on Public Integrity with jurisdiction over all elected state officials and their employees, both executive and legislative, as well as lobbyists. Among other restrictions, no individual will be eligible to serve on the Joint Commission who has within the last three years been a registered lobbyist, a statewide office holder, a legislator, a state commissioner or a political party chairman. Commissioners will be prohibited from making campaign contributions to candidates for elected executive or legislative offices during their tenure.


The Joint Commission will have jurisdiction to investigate potential violations of law by legislators and legislative employees and, if violations are found, issue findings to the Legislative Ethics Commission, which will have jurisdiction to impose penalties. Significantly, if the joint commission reports such a violation to the Legislative Ethics Commission (with full findings of fact and conclusions of law), that report must be made public along with the Legislative Ethics Commission’s disposition of the matter within strict timeframes. The Joint Commission will have jurisdiction to impose penalties on executive employees and lobbyists. Any potential violations of federal or state criminal laws will be referred to the appropriate prosecutor for further action.


This provision has proven controversial almost immediately. In order to initiate an investigation, the new Joint Commission will require that two appointees of the same party in a given branch assent. This means, as many have already pointed out, that in theory the commission could vote 11-3 to take action without anything being done. Similarly, the New York Times noted that “commissioners appointed by the Assembly speaker, Sheldon Silver, a Democrat, could effectively block investigations of any Democrat in the Legislature, while commissioners appointed by the Senate majority leader, Dean G. Skelos, a Republican, would have similar power over investigations of any Republican.”


Overall, however, it appears that most public interest groups believe that the newly proposed Joint Commission will strike the right balance between unbiased investigation and the prevention of politically motivated “witch hunts” against the party out of power.


Forfeiture of Pensions for Public Officials Convicted of a Felony: Certain public officials who commit crimes related to their public offices may have their pensions reduced or forfeited in a new civil forfeiture proceeding brought by the Attorney General or the prosecutor who handled the conviction of the official.


Clarifying Independent Expenditures For Elections: The Act requires the state board of elections to issue new regulations clarifying disclosure of Independent Expenditures.


Increased Penalties for Violations: The Act substantially increases penalties for violations of the filing requirements and contribution limits in the Election Law, and provides for a special enforcement proceeding in the Supreme Court. The bill also increases penalties for violations of certain provisions of the state’s code of Ethics that prohibits conflicts of interest.


Without a doubt, this legislation represents sweeping change that must be carefully studied, and compliance prepared for, by all doing business in New York.


Now, if only we could get the Governor to introduce a “Clean Up Washington Act”.

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Top Executive Search Firms - Who?s Best?

Some very basic research will tell you that Korn/Ferry International and Heidrick and Struggles are two of the largest search firms in the United States. If the largest firms were simply the best firms, it would be an easy decision to choose which executive search firms you would approach for your recruitment process outsourcing. But, [...]

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LEASED BANK GUARANTEE/SBLC VIA EUROCLEAR

? 3.0% DOWN as Initial Deposit with full payment due in 10 banking days ? Allows 10 banking days to pay for the instrument (most lenders require 48-72 hours) ? BG posted on Euroclear for easy verification ? Full access/blocking codes, ISIN etc. provided to client after initial deposit is paid. ? Corporate Undertaking to [...]

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Halliburton Class Action for Securities Fraud, Case Reinstated ? a Victory for Claimants

According to a June 6, 2011 article by James Vicini for Reuters (?Halliburton securities fraud lawsuit reinstated?) the U.S. Supreme Court has reinstated a securities fraud class-action lawsuit filed against Halliburton in 2001 by pension and mutual fund investors on behalf of all buyers of Halliburton stock between June 1999 and December 2001. Claimants in [...]

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SUCCESSFUL SELF-UNDERWRITTEN IPO?s

In order to do a Self-Underwritten initial public offering and be allowed to solicit investors, you must go public and file a registration statement with the SEC and follow other guidelines and procedures, which we assist you with. The president of our affiliate US. based law firm company is an experienced securities attorney so we [...]

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Legal Placement ? Some Do It Well?We Do It Right!!!!

Grimes Legal, Inc. (GLI) presents a unique approach among legal search firms, one which focuses on craftsmanship. We cover all disciplines within legal placement, which gives us the opportunity to work on a wide variety of projects. To us, effective recruiting is truly an art. It is the ability to be creative, to work outside [...]

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Third Quarter 2010 Report

Legal Placement ? Some Do It Well?We Do It Right!!!!

Grimes Legal, Inc. (GLI) presents a unique approach among legal search firms, one which focuses on craftsmanship. We cover all disciplines within legal placement, which gives us the opportunity to work on a wide variety of projects. To us, effective recruiting is truly an art. It is the ability to be creative, to work outside [...]

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Friday, August 26, 2011

Internal Oversight, the SEC and BigLaw

FINRA Expels Firm and Brokers Sanctioned

 Brewer Financial Services, LLC (CRD® #132558, Chicago, Illinois), Adam GaryErickson (CRD #3081286, Registered Principal, Chicago, Illinois) and Steven John Brewer (CRD #2214515, Associated Person, Chicago, Illinois)  submitted a Letter of Acceptance Waiver and Consent in which the firm was expelled from FINRA membership and Erickson and Brewer were barred from association with any FINRA member [...]

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Paper Lion Ahead for SEC's Pay-to-Play Exemption?

On March 14, the SEC's pay-to-play rule will come into effect and there is growing concern that the rule's exemption for accidental violations will result in an administrative hailstorm. The rule allows an advisor to apply to the SEC for an order exempting it from application of the two-year ban. Under such provision, the SEC can exempt advisers from the time out requirement where the adviser discovers triggering contributions after they have been made, and when imposition of the prohibition is unnecessary to achieve the rule's intended purpose. An exemption would be based on the facts and circumstances of each applicant, including the SEC's consideration of factors such as whether the adviser had a compliance program in place.


The SEC estimated that seven advisers would apply for the exemption each year, a number that several attorneys have speculated as too low given the number of investment advisers affected. On the other hand, the SEC utilized FINRA's data on exemption applications to calculate the estimate, and investment advisers have had several months to digest and prepare for the rule. Either way, whether March will come in like a lamb or a lion for the SEC is anyone's guess.

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A 2009 BigLaw Retrospective

A 2009 BigLaw Retrospective

Aviation Recruitment: What Companies Must Know Before They Hire

A few years back, the aviation industry looked like it was in turmoil. Profits were dropping and it seemed impossible that all but the largest carriers would survive the phase. But, the upswing for the aviation industry has begun recently and as you may know most aviation companies are in the process of recruiting large [...]

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Internal Oversight, the SEC and BigLaw

Milberg, Dreier, and the Shanda of It All

Did You Experience Significant Losses with Morgan Keegan?

Morgan Keegan Fund Losses* Ticker Bond Fund 2007 2008 RMH RMK High Income Fund (-)58.0% (-)39.0% RHY RMK Multi-Sector High Income Fund (-)60.6% (-)44.5% RMA RMK Advantage Income Fund (-)56.9% (-)39.1% RSF RMK Strategic Income Fund (-)58.1% (-)42.0% RHICX RMK Select High Income-C (-)59.9% (-)45.9% MKHIX RMK Select High Income-A (-)59.7% (-)46.1% RHIIX RMK Select [...]

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Thursday, August 25, 2011

Even the Government Turns to Recruiting Agencies To Find the Best Employees

Would you be surprised if I told you that a website which helps people find government jobs actually has a page that lists the names of executive search firms that can be approached for the jobs? You hardly expect government agencies to also depend on services of recruiting agencies, but it is nonetheless true.
Government Sectors [...]

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GLI Spotlights Carl Jackson!

Carl Jackson joined GLI in July of 2008 and is responsible for coordinating projects in the Washington, DC market. With more than 12 years experience in the legal industry in various positions, Carl has worked with many managing partners, hiring authorities, practice leaders and human resource/recruiting departments in most of DC?s top firms.
Carl has placed [...]

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Halliburton Class Action for Securities Fraud, Case Reinstated ? a Victory for Claimants

According to a June 6, 2011 article by James Vicini for Reuters (?Halliburton securities fraud lawsuit reinstated?) the U.S. Supreme Court has reinstated a securities fraud class-action lawsuit filed against Halliburton in 2001 by pension and mutual fund investors on behalf of all buyers of Halliburton stock between June 1999 and December 2001. Claimants in [...]

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Ambac & Others Agree to Pay $33M to Settle Fraud Allegations Surrounding Bond/Insurance Litigation

Ambac Financial Group Inc., as well as several of its banking underwriters and insurers, has agreed to pay a total of $33M in order to settle claims of investment fraud. According to investors who experienced significant financial loss, the parties involved hid risks from investors about the mortgage debt it guaranteed. The primary claimants in [...]

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New York City area loans available

Our lender has an appetite for New York City area loan requests! Anything with a decent completed value will be considered. Opportunities, hard money, refinances, refurbishment, construction, expansions, and acquisitions are all fair game. Below are other often overlooked market niches that are closing. Look to your existing clients or start a marketing program to [...]

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Top Executive Search Firms - Who?s Best?

Some very basic research will tell you that Korn/Ferry International and Heidrick and Struggles are two of the largest search firms in the United States. If the largest firms were simply the best firms, it would be an easy decision to choose which executive search firms you would approach for your recruitment process outsourcing. But, [...]

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Did Goldman Sachs Play an Unwholesome Role in the Recent Financial Crisis?

According to an article published by Reuters on June 2, 2011, Goldman Sachs has been subpoenaed by the Manhattan District Attorney?s Office for information regarding its role in events which precipitated the recent worldwide financial crisis. Earlier this year, the Wall Street Journal reported that the U.S. Department of Justice also plans to subpoena Goldman [...]

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Is It Really Too Late? Fraud, Statutes of Limitations & Recovering Investment Losses

Although it?s been three years since financial misconduct on Wall Street rocked the nation, investors still have opportunity to recoup some or all of their financial loss. If you suffered financial loss during the recent crisis, your broker, brokerage or financial advisor may be legally responsible for that loss. A variety of legal actions can [...]

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Christian Genitrini Fined and Suspended by FINRA

  Christian Genitrini (CRD #3277581, Registered Representative, New York, New York) submitted a Letter of Acceptance, Waiver and Consent in which he was fined $15,000, suspended from association with any FINRA member in any capacity for two years, and required to requalify by exam for Series 7 and Series 63 before becoming re-associated with a [...]

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Halliburton Class Action for Securities Fraud, Case Reinstated ? a Victory for Claimants

According to a June 6, 2011 article by James Vicini for Reuters (?Halliburton securities fraud lawsuit reinstated?) the U.S. Supreme Court has reinstated a securities fraud class-action lawsuit filed against Halliburton in 2001 by pension and mutual fund investors on behalf of all buyers of Halliburton stock between June 1999 and December 2001. Claimants in [...]

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Trenton Update (To the Tune of "Suspicious Minds")

We brought Trenton to your attention here just a few days ago to highlight the potential pitfalls of “ban first, inquire later” pay-to-play enforcement. At the time, we observed that Trenton Mayor Tony Mack’s effort to rescind a pay-to-play ban was “procedurally murky”. The Trentonian apparently agreed and reported on the issue complete with a YouTube embed of Elvis singing “Suspicious Minds” as a musical accompaniment to its call that “[t]here is no reason for the City of Trenton to continue with another embarrassing decision made by a city council that lacks backbone.”


This call precipitated two immediate effects. First, it instilled great personal shame in myself for having failed to this point to accompany my entries with Elvis embeds. I resolve to remedy that.


Second, public pressure such as that brought to bear by The Trentonian has caused the law firm in question, Cooper Levenson, to terminate its contract with the city over the issue. A copy of the termination letter can be found here. Whether this result was warranted or appropriate, one should bear this little tune in mind before contributing in Trenton.


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Wednesday, August 24, 2011

The Record 2509 2008 U.S. Partner Laterals

The Record 2509 2008 U.S. Partner Laterals

Casinos for sale

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Life Insurance Sold to Church Members Alleged Scam by Agents

In a June 17, 2011, article written by Darla Mercado for InvestmentNews.com, she writes that six life insurance agents claim that Aviva Life and Annuity Co. had consented to the offer of insurance coverage to some 119 churchgoers in Los Angeles. It was reported that insurance agents, Kazimir Patelski, Glenda Smith-Lee, Napoleon B. Kinney, Cheralynne Bridgewater, Candice [...]

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Will the SEC File Investment Fraud Charges Against Credit-Rating Companies?

Image via Wikipedia According to the Wall Street Journal, in May 2011 the Securities and Exchange Commission (SEC) acknowledged that credit-rating agencies, desirous of pleasing the companies they rate, are sometimes less than objective in their evaluations. To mitigate this problem, the SEC has proposed that credit-rating firms operate under stricter guidelines. This month, the [...]

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Life Insurance Sold to Church Members Alleged Scam by Agents

In a June 17, 2011, article written by Darla Mercado for InvestmentNews.com, she writes that six life insurance agents claim that Aviva Life and Annuity Co. had consented to the offer of insurance coverage to some 119 churchgoers in Los Angeles. It was reported that insurance agents, Kazimir Patelski, Glenda Smith-Lee, Napoleon B. Kinney, Cheralynne Bridgewater, Candice [...]

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Prince George's County, Maryland Adopts a Different Approach to Pay-to-Play

As we’ve observed here a few times before, nothing gets a legislator in the mood for regulatory action like press accounts of one of their own getting busted for pocketing a few dollars in exchange for government largess. One could hardly second guess Prince George’s County, Maryland for following this predictable pattern. In this case however, the funds forming the catalyst for action weren’t “pocketed” - they were “bra’d”.


Last November, the Washington, DC area was somewhat titillated by news reports that Prince George’s County Executive Jack B. Johnson and his wife, Prince George’s County Councilwoman-Elect Leslie Johnson had been arrested by the FBI in connection with an investigation into allegations that certain real estate developers in Prince George’s County, Maryland were bribing public officials in exchange for official acts benefitting the developers and their companies. The FBI moved in, it was reported, when their wiretaps overheard Johnson instruct his wife to flush a developer’s check for $100,000 down the toilet and to conceal another $79,600 in cash in her bra.


Regardless of where the money went, the result was inevitable - pay-to-play legislation.

In an interesting symbiotic pairing, corrective legislation is moving through the Maryland General Assembly at precisely the same pace as Prince George’s County Council member Leslie Johnson moves through the Maryland criminal justice system. On March 25, 2011, the very day the Justice Department filed new criminal charges against Johnson for conspiracy to commit witness and evidence tampering, Maryland’s House of Delegates passed House Bill 614 in response to the Johnson episode.


What makes the Maryland legislation unique is the approach taken to remedy the harm inflicted on public confidence in local government. The easy approach would have been to enact feel-good prohibitions against developer interactions with county executives. Such legislation is easy to pass but is exceedingly difficult for well-meaning citizens to comply with and often does little to prevent the truly nefarious bad actors who simply “find another way”. As the team at CityEthics.org correctly observed, the problem in Prince George’s County was not as much with the private sector but rather an inadequate ethics program and unique powers to hold up development unless a payoff is made:


But there can be no pay-to-play without special powers. Developers only pay when they have to. And there can be no special powers without a very poor ethics environment. It's a vicious circle, and it appears that Prince George's County is caught up in it.


House Bill 614 goes a long way towards addressing these issues, and does so by placing limitations where they belong, on the county executives who are perceived to have abused their far-reaching powers for personal gain. According to the Washington Post the County has long housed “complaints that past councils have operated secretively, threatening developers that their plans would be held up indefinitely unless they offered concessions or hired an associate of a council member.” If signed into law, the current legislation will severely curtail the County Council’s ability to shelve development deals and enhance the County’s ethics commission by installing a full time executive director and require regular meetings.


This strikes us a sensible approach, targeted to address a clearly identified problem, that does not place undue hardships on the honest 99% in the private sector who have succeeded in keeping their knickers clean.

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Costs Associated with Investing in Mutual Funds

If you?ve invested in mutual funds, you should know that taxes can affect your investment, sometimes significantly reducing your net returns. To completely avoid federal taxes, consider investments such as tax free municipal bonds. Also be aware that some mutual fund investments are more tax efficient than others. Below is some basic information regarding mutual [...]

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Tuesday, August 23, 2011

President Obama (Again) Looks to Impose a Form of Federal Pay-to-Play Disclosure on Federal Contractors

Last year, we reported here and here that certain elements of the Executive Branch have been looking into ways to impose federal pay-to-play restrictions and disclosure requirements on those doing business with the federal government. Today, the White House confirmed that President Obama is strongly contemplating issuing an executive order designed to impose pay-to-play disclosures on federal contractors in a big way.


As announced by the White House, the President is http://www.washingtonpost.com/politics/obama-weighs-disclosure-order-for-cont...">examining an order that would mandate that all federal contractors disclose any and all contributions to groups that engage in political activities. This is contemplated, the White House says, in direct response to the Supreme Court’s opinion in Citizens United v. FEC (discussed here) and Congress’ failure to enact the DISCLOSE Act (discussed here).

To learn more about what, exactly, the President has in mind, one needed to be on board Air Force One (headed to California on a Presidential and DNC fundraising swing, ironically enough) to hear White House Press Secretary Jay Carney say the following:


Q Jay, there was -- there were reports this morning that the administration is considering an executive order requiring companies seeking government contracts to disclose their contributions to groups that under current law would be secret. Is that correct?


MR. CARNEY: Well, what I can tell you is there is a draft -- there’s a process, and it’s in the -- it’s part of a process. There’s a draft, and the particular specifics of that executive order could change over time, so I can’t talk about the specifics. What I can tell you is the President is committed to improving our federal contracting system, making it more transparent and more accountable. He believes that American taxpayers deserve that, and that's what he intends to pursue through this executive order.


Q Is there any political goals behind this?


MR. CARNEY: Quite the contrary. He believes very strongly that taxpayers deserve to know whether or not the contractors that their money is going to is being used -- how they're spending their money, and how -- whether they're -- how they're spending in terms of political campaigns. And his goal is transparency and accountability. That's the responsible thing to do when you’re handling taxpayer dollars.


Q Is he likely to go ahead with the executive order? Or is there another way to accomplish it?


MR. CARNEY: I can’t -- there’s an executive order in the draft process. I can’t give you any specifics on it because the specifics could change. That's the nature of the process.


Q Jay, on a trip like this that combines presidential events with campaign events, can you talk about how it’s funded? For example, there are no presidential events in Los Angeles. Is that entire part of the trip funded through the campaign?


MR. CARNEY: Ari, you know the -- when there is travel like this that involves official travel and also political travel, this administration very diligently follows all the same rules that the Bush administration did. And as far as the specifics on how that breaks down, I’ll have to get back to you. I don't have that. But we’re very careful about making sure that all those rules are followed.


“Diligently [following] all the same rules that the Bush administration did” and breaking substantial new ground all at the same time. That’s a pretty impressive two-step.


One immediate challenge comes to mind: if all federal contractors and bidders are required to disclose their contributions to groups of any kind that engage in political or issue advocacy, how does one prevent federal contract officers from demonstrating bias against bidders supporting unpopular views or the party out of power? This is a decent enough effort at transparency that strikes me as having the potential to trod all over our constitutional rights to free expression and freedom of association. To quote David Wenhold, immediate past president of the American League of Lobbyists, “Sunlight is good, but sometimes too much sunshine can cause cancer.”


This is definitely one to stay tuned to.

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Atlanta Takes Another Shot at Procurement Restriction

Fulton County, Georgia – home county to the City of Atlanta - is poised once again to take up an ordinance designed to prohibit any corporation, officer, agent or individual who makes relevant campaign contributions or gifts from seeking county contracts. Just yesterday, the Fulton County Commission announced an agenda item for its August 17, 2011 recess meeting. Deep on page 12 of that agenda is a single line item styled:


Request approval of a Resolution amending the Fulton County Code of Laws regarding campaign contributions from entities doing business with, or seeking to do business with, Fulton County.


The resolution to be taken up, proposed by Commissioner Emma Darnell, closely mirrors a pay-to-play contract restriction proposed two years ago for the City of Atlanta by Common Cause Georgia.  In its current form, the proposed resolution provides that no corporation, entity, or individual will have the right to bid for, or hold, a county contract if it has either made a campaign contribution of $500 or more to a County Commissioner or has provided any direct or indirect gift or contribution to a County Commissioner or any Fulton County employee.

For the purposes of determining whether a person has reached the $500 threshold, Commissioner Darnell’s resolution proposes aggregating all contributions or gifts made by an individual, their parents, siblings, spouse, or children as well as by any company that the individual controls or holds a 10% stock interest in. With respect to company contributions and gifts, the proposed resolution would aggregate all contributions or benefits conferred by any “officers, directors, partners, members, or salaried employees of the entity, and of any affiliated or subsidiary entities.”


Yes, you read that right. Under the proposed resolution, a company such as Delta Air Lines would theoretically be debarred from contracting with Fulton County (they have an airport in Atlanta, don’t they?) if even one of its salaried employees pays for a birthday cake for a next door neighbor who just happens to be a Fulton County employee. (Transparency Note: Delta Air Lines is a client of our firm, but this example could just as easily apply to any corporation having any employee who inadvertently makes a $500 campaign contribution or any gift to a County Commissioner or county employee).


As this blog has noted before, well-meaning and good-intentioned efforts to restrict back room dealing almost always get hoisted upon the petard of the broad language necessary to prevent circumvention but predictably results in negative, unintended consequences. The Law of Good Intentions almost always loses out to the  Law of Unintended Consequences.  Under this proposal, compliance costs will skyrocket, as will the likelihood of unnecessary and inefficient bid protest litigation due to inadvertent violations. In light of these potential effects, simple disclosure of all campaign and gift activity in the contracting process strikes me as the much more sensible approach.


I also have concerns that such restrictions will needlessly limit campaign activity and chill political speech inside of Fulton County. The words I wrote two years ago here still ring true to my ear:


While few would argue that the procurement process in Atlanta doesn't need more sunshine, the Common Cause proposal appears to go a few steps to far. Most troublesome is the proposal to prohibit persons who make contributions of over [$500] from bidding on any … contracts for the next year, as the prohibition applies even if the contract in question was not in existence at the time of the contribution. Restricting contribution amounts in this manner would undoubtedly chill the making of political contributions for City of Atlanta elections altogether, as any person or entity with any potential interest in any City contract in the future could not make contributions without the fear of being locked out of all future business. This is the sort of broad restriction that has proven to be problematic in jurisdictions such as Colorado. Similarly problematic is the apparent willingness to consider contributions by spouses and children of contributors in making prohibition determinations. Again, Colorado should serve as a cautionary tale here.


Needless to say, Common Cause Georgia, and many others, do not share my concerns. Whether Fulton County’s proposed resolution passes tomorrow or not, however, the waves of “restriction as reform” continue to hit the beach.

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SEC Pay-to-Play Rule Factor in Republican GOP Presidential Primary Fundraising Battle

Much has been written and said about the SEC’s new pay-to-play rules, which will go into effect on March 14.


Recent commentary has generally focused on the lack of certainty to the business community on how these rules will be applied, as well as the administrative difficulties that will likely arise as the rule first goes into effect. RealClearPolitics has an interesting new take on the regulations, which focuses on how this could impact the 2012 Republican Presidential Primary.


More on that later. As a reminder, the SEC’s new rule has three key elements:


1) It prohibits investment advisors from providing advisory services for compensation—either directly or through a pooled investment vehicle—for two years, if the advisor or certain of its executives or employees have made prohibited political contributions to an elected official in a position to influence the selection of the advisor;


2) It prohibits advisory firms and certain executives and employees from soliciting or coordinating campaign contributions from others (a practice referred to as “bundling”) for any elected official in a position to influence the selection of the adviser. It also prohibits solicitation and coordination of payments to political parties in the state or locality where the adviser is seeking business; and

3) It prohibits investment advisors from paying third parties, such as placement agents, from soliciting a government client on behalf of the investment adviser, unless that third party is an SEC-registered investment advisor or broker/dealer subject to similar pay to play restriction.
Importantly, for the purposes of campaign fundraising, it doesn't matter whether a state official directly oversees a fund or can appoint someone who does. In either situation, investment advisers interested in obtaining contracts for those funds cannot donate more than $150 to their campaigns in a cycle. The limit goes up to $350 if the investment adviser lives in the state of the elected official.


National political reporter for RealClearPolitics, Erin McPike, writes in "SEC 'Pay to Play' Rule Could Inhibit Barbour, Daniels" that:


Daniels has a direct role on a board that oversees some public funds in the Hoosier State, and Barbour appointed his chief of staff to sit on a board that oversees the public retirement fund in Mississippi, meaning both potential presidential contenders’ campaign accounts could take a hit from the new rules.


In the presidential race, they appear to be the only two politicians in the still-forming field who could be affected by the rule. President Obama is not affected, and the rest of the GOP field is populated by former officials and a senator, none of whom have to worry about the rules.


It remains to be seen how deeply the rules will shape the money chase in the impending GOP presidential primary. A number of sources say that while the giving trends of investment advisers have tended to favor Democrats, there's a growing interest in the industry for two potential Republican candidates: [Mitt] Romney, who isn't affected by the rules, and Daniels, who is.


Interestingly, the SEC’s rules are also impacting other races nationwide. McPike further explains:


Of course, the rules affect candidates down the ballot and across the country, so Barbour and Daniels are not alone. Take Indiana, for example. Indiana Treasurer Richard Mourdock plans to challenge Republican Sen. Dick Lugar in a primary, so Mourdock's role on the same board on which Daniels sits that oversees a state fund impairs the treasurer's ability to raise money from this part of the financial services industry. If Republican Rep. Mike Pence runs for governor, he'll face the same complication given the governor's role on the board and the fact that candidates for affected offices are included.


In neighboring Ohio, Treasurer Josh Mandel has the authority to appoint an investment designee to the Ohio Public Employees Retirement System Board of Trustees. Mandel, a Republican, is a potential opponent for Democratic Sen. Sherrod Brown, and investment advisers would be subject to penalty if they donated substantial contributions to him for the Senate race.


Chalk this up as another unintended consequence of pay-to-play regulations. While it is still unclear just how much these restrictions will limit an impacted candidate’s fundraising prowess, what is clear is the need for comprehensive compliance programs in order to proactively address these challenges prior to March 14.

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