Solicitation of Municipal Securities Business

While Rule G-37 addressed the issue of investment bankers trying to influence elected officials through political contributions, it led to the increased use of politically connected consultants to solicit business for underwriters. The MSRB tackled this problem in 2005 with Rule G-38, which prohibits broker-dealers from paying any person to solicit municipal securities business on their behalf who is not an affiliated person of the firm. As defined by MSRB Rule G-38, an affiliated person means anyone who is a partner, director, officer, employee, or registered person of the