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SEC limits political gifts after abuse scandals

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Thursday, July 1, 2010

REGULATORS

SEC limits political gifts after abuse scandals

The Securities and Exchange Commission voted Wednesday to restrict investment advisers from contributing to political campaigns to win pension business in response to abuses in an industry that oversees $2.6 trillion of public retirement funds.

On a 5-to-0 vote, the commission move to ban executives at private-equity firms and hedge funds from managing pension-fund assets for two years if they give money to elected officials with influence in awarding investment contracts.

"Pay-to-play distorts municipal investment priorities, as well as the process by which managers are selected," SEC Chairman Mary L. Schapiro said.

The SEC and New York Attorney General Andrew M. Cuomo have investigated state pension-fund corruption for more than a year. Quadrangle Group LLC, the private-equity firm co-founded by former Obama administration auto czar Steven Rattner, agreed in April to pay $12 million to resolve allegations it provided kickbacks to win an investment from a New York state retirement fund.

The SEC rules would bar hedge-fund and private-equity executives from directing contributions by spouses, lawyers, affiliated companies or political action committees.

-- Bloomberg News

MANUFACTURING

Government aid to Airbus illegal, WTO rules

The World Trade Organization ruled Wednesday that European governments gave planemaker Airbus illegal subsidies in its battle with U.S. rival Boeing, in a first key ruling on a long-running dispute between the European Union and Washington.

Made public three months after it was delivered to U.S. and E.U. trade officials, the WTO's decision runs 1,061 pages over the question of whether the E.U. unfairly abetted Airbus's rise to No. 1 aircraft manufacturer in the world.


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