Private Equity Firm TL Ventures Settles SEC Pay-to-Play Case

Jun 20, 2014 5:32 pm ET

(Updates with TL Ventures comment in sixth paragraph.)

June 20 (Bloomberg) -- Private-equity firm TL Ventures Inc. violated pay-to-play rules by winning business from public pension funds after an associate of the company made a campaign contribution to the governor of Pennsylvania, U.S. regulators said.

The firm, based in Wayne, Pennsylvania, agreed to pay about $300,000 to settle the Securities and Exchange Commission claims -- the first brought under pay-to-play rules for investment advisers, according to an SEC statement today.

“We will use all available enforcement tools to ensure that public pension funds are protected from any potential corrupting influences,” Andrew Ceresney, director of the SEC’s enforcement division, said in the statement.

TL Ventures violated rules by continuing to receive compensation from Pennsylvania’s state retirement system and Philadelphia’s pension plan within two years after an associate made a $2,500 campaign contribution to a Philadelphia mayoral candidate and a $2,000 gift to the governor of Pennsylvania, the SEC said.

The mayor appoints three of the nine members of the Philadelphia Board of Pensions and Retirement. The 11-member board of Pennsylvania’s state retirement system includes six gubernatorial appointees, the SEC said.

“TL Ventures is pleased to have this matter behind it and will continue to focus on serving its investors,” Catherine Botticelli, an attorney for the firm, said in an e-mailed statement.

Pay-to-play rules adopted in 2010 prohibit investment advisers from providing services for two years following a campaign contribution to political candidates or officials in a position to influence the selection or retention of advisers to manage public pension funds.