Following a disappointing year for Bill Ackman, in which his Pershing Square returned -13.5% (although it has at least started off 2017 on the right foot, up 1.9% YTD), moments ago Ackman got some bad and some good news. The bad news is the Pershing Square was among 10 investment advisory firms who were busted by the SEC for engaging in pay-to-play schemes, or accepting pension fund fees within two years of making donations. The good news: the penalty is a whopping $75,000.

The details:

The Securities and Exchange Commission today announced that 10 investment advisory firms have agreed to pay penalties ranging from $35,000 to $100,000 to settle charges that they violated the SEC’s investment adviser pay-to-play rule by receiving compensation from public pension funds within two years after campaign contributions made by the firms’ associates. According to the SEC’s orders, investment advisers are subject to a two-year timeout from providing compensatory advisory services either directly to a government client or through a pooled investment vehicle after political contributions were made to a candidate who could influence the investment adviser selection process for a public pension fund or appoint someone with such influence. The SEC’s orders find that these 10 firms violated the two-year timeout by accepting fees from city or state pension funds after their associates made campaign contributions to elected officials or political candidates with the potential to wield influence over those pension funds. “The two-year timeout is intended to discourage pay-to-play practices in the investment of public money, including public pension funds,” said LeeAnn Ghazil Gaunt, Chief of the SEC Enforcement Division’s Public Finance Abuse Unit. “Advisory firms must be mindful of the restrictions that can arise from campaign contributions made by their associates.”

But why focus only on the investment advisor: aren't the pension funds just as culpable for allocating cash to funds they received money from? Well, in the case of Pershing Square, perhaps the thinking goes that giving Ackman money to money was punishment enough.

Amusingly, the complaing filed against Pershing Square, the SEC notes the following:

Pershing Square Capital Management, L.P. is a limited partnership located in New York, New York. Pershing Square is registered with the Commission as an investment adviser. In its Form ADV dated March 30, 2016, Pershing Square reported regulatory assets under management of approximately $15 billion

In light of recent events, the SEC may want to get an updated AUM.

The full complaint is below (link)