SEC Rule
"Even inadvertent violations of the rule can prohibit investment advisers from providing services for compensation for a period of two years," the group said in the notice that was circulated to funds, a copy of which appears on the group’s website. Similar rules also apply to municipal advisers and swap dealers.
The financial industry has been a mainstay of support for Republican presidential and congressional candidates.
Goldman Sachs’s employees and the company’s political action committee have contributed $1.4 million to Republican candidates in 2016, and were the top donor to Mitt Romney’s presidential campaign in 2012, giving the former Massachusetts governor $1 million, according to the Center for Responsive Politics, which studies campaign finance. By contrast, Trump has received a total $3,200 from the Goldman Sachs employees and nothing from the PAC.
While concern over the pay-to-play rule might explain some of the disparity, Trump drew little support from the industry during the primaries, before he named Pence as his running mate.
The U.S. Securities and Exchange Commission enacted the pay-to-play rule in 2010 after a series of scandals involving money managers accused of trying to improperly influence state officials to get investment-management business. Some of that influence included arranging political contributions.
Goldman Sachs’s new policy doesn’t pertain to Hillary Clinton’s presidential campaign since the Democratic candidate and her running mate, Virginia Senator Tim Kaine, are not state or local officials under the SEC rule.
Goldman Sachs already requires all employees to get approval for proposed political contributions, according to a corporate governance statement, to screen for possible violations. The new policy also is designed to minimize damage to Goldman Sachs’s reputation that could be caused by “any false perception that the firm is attempting to circumvent pay-to-play rules, particularly given partners’ seniority and visibility,” according to the memo.
This article was provided by Bloomberg News.