SEC Charges Investment Adviser for Pay-To-Play Violation Involving a Campaign Contribution

ADMINISTRATIVE PROCEEDING
File No. 3-21914

April 15, 2024 - The Securities and Exchange Commission today charged Wayzata Investment Partners LLC for violating the SEC's pay-to-play rule for investment advisers. The SEC found that the firm violated the rule by continuing to provide investment advisory services for compensation from a government entity following a campaign contribution made by an associate to an elected official with influence over selecting investment advisers for the government entity.

According to the SEC's order, the pay-to-play rule prohibits investment advisers from providing compensatory advisory services - either directly to a government client or through a pooled investment vehicle - for two years following a campaign contribution by the firm or certain associates to candidates or officials in a position to influence the selection or retention of investment advisers to manage the assets of public pension funds or other public entities. According to the SEC's order, Wayzata Investment Partners violated the pay-to-play rule by continuing to receive compensation from a government entity within two years after a campaign contribution to an elected official who had influence over the selection of investment advisers for advisory services for the government entity.

The SEC's order finds that Wayzata Investment Partners willfully violated Section 206(4) and Rule 206(4)-5 thereunder of the Investment Advisers Act of 1940. Without admitting or denying the SEC's findings, Wayzata Investment Partners consented to a cease-and-desist order and to a censure and agreed to pay a $60,000 civil money penalty.

The SEC's investigation was conducted by Kevin B. Currid and Louis A. Randazzo from the Enforcement Division's Public Finance Abuse Unit.

• Order - Wayzata Investment Partners LLC