SEC Fine IA Muni Pay-to-Play

On Jul. 10, SEC fined Oaktree $100k for muni pay to play violations.

  • Oaktree Capital Management settled charges of violating muni pay to play rules.

Rule Restrictions

  • Found breach of IAA S. 203(e), 203(k) of the Investment Advisers Act of 1940.
  • Violated SEC pay-to-play rule Rule 206(4)-5 for advisers, under IAA, S. 206(4).
  • Prohibits IAs from providing advisory services for compensation to government
    client for two years after the adviser or executives made campaign contribution.
  • To elected officials or candidates, where can influence selection of such advisers.

Alleged Violations

  • three associates of firm made campaign contributions to candidates for office in
    California and Rhode Island, which offices had influence over selecting advisers.
  • Within two years after the contributions, firm provided advisory services for fee.


  • SEC imposed $100k penalty, remedial sanctions, and a cease-and-desist order.
  • Also granted Oaktree waiver, from ineligible issuer status, under SRT Rule 405.