MSRB Rule G-37 provides readers with a roadmap - a scorecard, if you will - when reading the story of the ex-Goldman banker who's under investigation for allegedly providing advisory services to a politician while soliciting that state's municipal finance underwriting business. 

Go to:   Rule G-37 - Political Contributions and Prohibitions on Municipal Securities Business. 

    Purpose for Rule.    MSRB wants to ensure that the high standards and integrity of the muni securities industry are maintained, to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to perfect a free and open market and to protect investors and the public interest.

    How Rule is Implemented.   MSRB: (i) prohibits brokers, dealers and municipal securities dealers from engaging in municipal securities business with issuers if certain political contributions have been made to officials of such issuers; and (ii) requires brokers, dealers and municipal securities dealers to disclose certain political contributions, as well as other information, to allow public scrutiny of political contributions and the municipal securities business of a broker, dealer or municipal securities dealer.

    Ban on Municipal Securities Business.   (i) No broker, dealer or municipal securities dealer shall engage in municipal securities business with an issuer within two years after any contribution to an official of such issuer made by: (A) the broker, dealer or municipal securities dealer;  B) any municipal finance professional associated with such broker, dealer or municipal securities dealer; or (C) any political action committee controlled by the broker, dealer or municipal securities dealer or by any municipal finance professional;

provided, however, that this section shall not prohibit the broker, dealer or municipal securities dealer from engaging in municipal securities business with an issuer if the only contributions made by the persons and entities noted above to officials of such issuer within the previous two years were made by municipal finance professionals to officials of such issuer for whom the municipal finance professionals were entitled to vote and which contributions, in total, were not in excess of $250 by any municipal finance professional to each official of such issuer, per election.

    Municipal Finance Professional.   For an individual designated as an "MFP" solely pursuant to subparagraph (B) of paragraph (g)(iv) of this rule, the provisions of paragraph (b)(i) shall apply to contributions made by such individual to officials of an issuer prior to becoming a municipal finance professional only if such individual solicits municipal securities business from such issuer.

The rule would apply to contributions made by this MFP professional for the period beginning 6 months prior to the individual becoming a municipal finance professional.