Blount v. SEC
United States Court of Appeals for the District of Columbia Circuit
61 F.3d 938 (1995)
- Written by Brett Stavin, JD
Facts
Beginning in late 1993, federal regulators investigated reports of unethical behavior concerning the manner in which municipal-securities brokers and dealers secured contracts to underwrite bond issuances. The practice, labeled pay to play, concerned situations in which a broker or dealer made political contributions to a state or local politician. Then, when a municipal bond was later being issued, the politician would steer the underwriting contract to that broker or dealer’s firm. The Municipal Securities Rulemaking Board, a subdivision of the Securities and Exchange Commission (SEC) (defendant), promulgated Rule G-37, which was designed to prevent such practices. Subsection (b) of Rule G-37 restricted contributions by municipal-securities professionals to state officials; subsection (c) prohibited solicitations of contributions; and subsection (d) prohibited indirect violations of subsections (b) and (c). The SEC approved the rule, stating that it supported the interests of protecting municipal-bond investors and protecting underwriters from unfair and corrupt market practices. William B. Blount (plaintiff) filed an action in federal district court against the SEC, challenging Rule G-37 as being in violation of his First Amendment right to speech and free association.
Rule of Law
Issue
Holding and Reasoning (Williams, J.)
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