In this episode, we are looking at SEC Rule 206(4)-5, which relates to political contributions. Unsavory investment advisors in cahoots with unscrupulous politicians and their operatives decided in the past to trade political favors namely in the form of political contributions for the act of directing state run retirement plans towards those asset managers that facilitated those political contributions. The way the SEC dealt with this problem was to create rules around the limits, monitoring and approvals of political contributions by asset managers and prohibitions on the management of government plans where someone made political contributions in the past.