Companies to host Aug. 2 webinar to address industry best practices to ensure compliance during this election cycle
NEW YORK, July 27, 2022 — ComplySci, the leading provider of regulatory technology and compliance for the financial services sector, in partnership with illumis, a ComplySci company, released a pay-to-play compliance guide to help financial firms navigate the nuances of federal regulations on political contributions and identify risk-mitigating solutions.
The 2022 Ultimate Guide to Pay-to-Play Compliance outlines recent changes, implications of federal, state and local pay-to-play rules in an election year and best practices to address these risks. The federal government and more than 20 states have pay-to-play regulations, with more states and municipalities expected to approve similar measures in the coming months and years.
“Political engagement and contributions have increased significantly since the adoption of the SEC’s pay-to-play rule in 2010, increasing compliance risk for financial firms who do business with government entities,” said NRS President John Gebauer. “We want to ensure compliance professionals have an integrated, comprehensive program to track, detect and review any political contributions made by a firm and its covered associates to avoid triggering the rule and being unable to do business with the government entity which was, intentionally or not, inappropriately influenced. “
According to campaign finance reports filed with the Federal Election Commission, presidential candidates raised and spent $4.1 billion in the 2019 – 2020 election cycle. Meanwhile, Congressional candidates raised another $4 billion and political action committees raised roughly $13 billion. Direct contributions provide the most apparent risks, but indirect contributions which are either in-kind donations, look-back provisions or accidental, such as registering for a fundraiser or dinner, can also trigger violations.
“The current SEC has an ambitious and aggressive agenda to address systemic fraud and conflicts of interest, which can harm investors and corrupt our public markets,” said Gebauer. “Their focus on this mission was readily apparent when they recently simultaneously announced insider trading charges against 10 individuals in four separate schemes, including a former U.S. congressman. The commission often announces a batch of orders as the culmination of a targeted investigation of issues they find permeating the markets.”
In 2017 and 2018, the SEC settled 13 pay-to-play enforcement proceedings, which resulted in fines ranging from $35,000 to $500,000. These cases all involved political contributions made in prior election cycles.
Download ComplySci’s 2022 Ultimate Guide to Pay-to-Play Compliance to learn more ahead of the 2022 midterm election season.
Addressing pay-to-play risk in an election year webinar
ComplySci will host a webinar on Aug. 2 at 1 p.m. Eastern, titled “Addressing Political Contribution Risk During a Midterm Election Year,” which aims to address:
- The complex array of federal, state and local regulations.
- The heightened political contribution risk firms face, specifically during a midterm election year.
- The potential “hidden risks,” which could result in serious enforcement action.
- How firms can address and mitigate risk.
- The role technology plays in proactively preventing purposeful or accidental pay-to-play compliance violations.
The panelists include:
- Teacher Retirement System of Texas Chief Compliance Officer and General Counsel Heather L. Traeger.
- Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates Political Law Counsel Tyler Rosen.
- RIA in a Box Enterprise Chief Compliance Officer Lisa Tolar.
- ComplySci Senior Customer Success Manager Tori Patton.
Register now at complysci.com to learn more.
ComplySci believes advanced compliance technology empowers compliance professionals to transform their business. More than 7,000 customers, including some of the world’s largest financial institutions, rely on ComplySci’s scalable and sophisticated platform to stay ahead of risk and unlock the strategic potential of their compliance data. The company’s family of firms includes ComplySci, RIA in a Box, illumis, a ComplySci company, NRS, a ComplySci company, and ITEGRIA®, a division of RIA in a Box.
Together, the family of firms offer a full suite of governance, risk and compliance (GRC) consulting, technology, managed services, analytics and outsourcing solutions for the financial services industry. Its regulatory technology solutions help compliance organizations identify, monitor, manage and report on risk and conflicts of interest, including personal trading, gifts and entertainment, political contributions, outside business affiliations and other Code of Ethics violations. Learn more at complysci.com.
illumis builds tools for transparency, with public data monitoring solutions trusted by leading institutions to help provide insight and manage risk. The company offers the industry’s leading political contribution monitoring solution, trusted by leading financial institutions – including some of the world’s largest banks and asset managers – to manage compliance and avoid costly risks from potential regulatory violations.
illumis aggregates data from thousands of sources, building the most complete and comprehensive dataset of campaign finance data available, with data updated daily. Its easy-to-use interfaces and integrated preclearance and certifications modules help compliance teams streamline and automate their workflows. Learn more at illumis.com.
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