As the elections approach nationwide, advisers to private investment funds with current or prospective state or local government entity investors should be mindful of political activities by their personnel which could raise concerns under existing pay-to-play regulations. While seemingly straightforward in application, the SEC’s pay-to-play regulations have the potential to present a number of complex questions for private fund investment advisers to pooled investment vehicles with existing, or prospective, state government or retirement plan investors.  Investment advisers need to be both versed in the SEC’s interpretation in various political activities, and vigilant in monitoring employees’ contributions.  Firms that neglect to implement necessary pay-to-play compliance measures may imperil valuable government plan relationships and risk significant reputational harm with other clients.

Guidance on these intricate issues can be found by reviewing the Proskauer client alert available here.