BlackRock Petitions SEC over Ohio Pay-to-Play Violation

Pay-to-play violations can be costly to money management firms.  BlackRock has petitioned the SEC for an exemption from the prohibition against its collection of fees from Ohio-based “government entity” clients, following a violation of the so-called “pay to play” rule stemming from a $2,700 contribution to the presidential campaign of Ohio Governor John Kasich by one of its top executives. Absent exemptive relief, BlackRock will be denied the ability to collect fees, totaling an estimated $37 million, from any Ohio government entity. The petition comes at a critical juncture, as top SEC roles have finally been filled, and many observers are closely following actions taken by the SEC to assess whether the new administration’s pro-business stance is rhetoric or a reality. BlackRock’s prospects for winning an exemption may be brighter than they would have been before President Trump took office, but many forces are likely to shape the outcome, including SEC actions as recent as January 2017 that sent a loud and clear message about the seriousness of pay to play violations. (https://www.sec.gov/news/pressrelease/2017-15.html)

According to Bloomberg, “Mark Wiedman, the head of BlackRock’s iShares unit, donated $2,700 to John Kasich in January 2016 during a fundraiser for the Ohio governor’s campaign to become the Republican presidential nominee, according to a regulatory filing.”

Bloomberg goes to say, “Wiedman inadvertently triggered anti-corruption measures that the U.S. Securities and Exchange Commission adopted in 2010 after scandals involving money manager contributions to state officials, the firm said. The pay-to-play rules affected the 2016 presidential campaign because five sitting governors participated, including Mike Pence of Indiana, Donald Trump’s running mate in the general election.”

SixLambda can help your firm avoid pay-to-play violations.  Please contact us at:

(800)815-2976

jon@sixlambda.com

#Blackrock #Ohio #PaytoPlay #Violation

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