An Intro Presentation to our political contribution verification software.

1. Cover your (political) bases.

2. Financial Firms and Contractors regulated by multiple entities
● Securities Exchange Commission Rule
206(4)-5, which limits, and in many cases,
prohibits political contributions by
investment advisors to elected officials or
candidates who have direct or indirect
control over governmental pension funds;
● Financial Industry Regulatory Authority
Rule 2030, which generally follows the
SEC's Rule 206(4)-5;
● Contractors to Municipal, State, and
Federal Governments must follow a
dizzying array of pay-to-play regulations.
● MSRB: Municipal Securities
Rulemaking Board Rule G-37, which
prohibits brokers, dealers, and municipal
security dealers from engaging in the
municipal securities business if they have
made disqualifying political contributions
to covered municipal officials; and
● Commodity Futures Trading
Commission Regulation 23.451, which
prohibits swap dealers from offering or
entering into a swap with a governmental
Special Entity if a disqualifying political
contribution was made within a two-year
lookback

3. How are you safe guarding your firm?
● Typically, companies offer pre-clearance forms on their employee’s
automated compliance software
● When employees neglect to fill out this pre-clear or disclose, contributions can
result in costly issues for the entire firm
● Manually searching for political contributions can take weeks of monotonous
work for compliance professionals
● Most all compliance programs are missing a thorough verification layer
That’s why we formed Six Lambda.

4. Solution: Six Lambda Monitoring Tools
● We protect you and your
employees, by scraping
contribution data at the federal,
state, and local level.
● Even if your employee does not
pre-clear a campaign donation you
will know about it through our
rigorous search capabilities

5. We manually collect all political giving
at the Federal, State & Local level
daily and alert you if we see a new
transaction from one of your
employees within 24 hours of posting.
This data comes from over 50
sources, and we standardize it into a
central database to easily query daily
for your firm.
How it works:

6. We currently serves clients . . .
. . . managing over $180 billion in assets under management.
. . . in Private Equity, Hedge Fund, and Mutual Fund
companies.
. . . companies with very politically active principals.

7. 9 Recent Enforcement Actions
Over the past several years, the
SEC has stepped up their
enforcement actions regarding
campaign finance rule
violations.
Adams Capital Management $45,000
Aisling Capital $70,456
Alta Communications $35,000
Commonwealth Venture Management $75,000
Cypress Advisors $35,000
FFL Partners $75,000
Limerock Management $75,000
NGN Capital $100,000
The Banc Fund Company $75,000

8. Case Study #1 - Pershing Square Management
● A former analyst made a single $500 contribution to a candidate for Governor of Massachusetts in
excess of the $150 limit
● The analyst failed to pre-clear the contribution and as a result it was made without the apparent
knowledge of the firm’s chief compliance officer
● The analyst made the contribution for personal reasons (family friend request) more than 2 years
after the initial investment was made with the firm
● The analyst never spoke with the state’s investment representatives
● The analyst was not an executive or an equivalent and given his job description may not have been
considered a “covered associate”
● FINE: $75,000

9. Case study #2: TL Ventures
● 1999 - TL Ventures raised money for a fund including a $35 million commitment from the PA State
Employees’ Retirement System (SERS)
● 2000 - TL raised money for another fund including a commitment from both SERS and the City of
PA Board of Pensions and Retirement of $50 million
● Both funds included a five-year investment period and a 10-year total life cycle
● 2011 - Firm co founder Bob Keither made political donations to a Philadelphia Mayor and PA
Governor Tom Corbett
● These investments seem to be legal, but the SEC determined that each of these funds also had the
possibility of requesting a pair of one-year extensions following the 10 year life cycle.
● These extensions meant the pensions would be charged for additional fee expenses
● Even if no fund extension had been required the co-founder was prohibited from making a
contribution until all regular fee payments had ceased
● TL Ventures settled on fine of $300,000

10. Contact us:
Nicole Lundergan (610) 632-6606
VP - Sales and Marketing nicole@sixlambda.com