(CN) - A trio of state Republican organizations have asked the 11th Circuit to overturn a Security and Exchange Commission rule that places tight limits on political contributions from financial advisors and others in the industry.
The SEC rules were drafted by the Financial Industry Regulatory Authority, and have been subject to push back from the GOP from the beginning.
In their Oct. 20 petition to the 11th Circuit, the Georgia and Tennessee Republican parties and the New York Republican Committee claim the new political contributions rules are an unconstitutional overreach by the agency and therefore unenforceable.
Having asked and failed to get the SEC to roll back the new rules, the plaintiffs now seek a permanent injunction against them from the appellate court.
"Congress did not empower the Commission, let alone the FINRA to regulate contributions when it is granted generic authority to establish rules 'designed to prevent fraudulent and manipulative acts and practices,'" the complaint says.
The plaintiffs argue that only Congress can regulate campaign finance under the Constitution, and that should supersede the new rule's enforcement.
The GOP also argues the new rules violate the First Amendment rights of FINRA member firm and their employees, forcing them to choose between financially supporting candidates or participating in campaign activities for pay. The law says they cannot do both.
The Republicans cite the Supreme Court's McCutcheon v. FEC decision, in which the justices, divided 5-4, held that imposed limits on contributions an individual can make over a two-year period to national party and federal candidate committees, is unconstitutional.
In the current case, the GOP claims the ruling confirmed that the only legitimate governmental interest sufficient for restricting political contributions is preventing "quid pro quo corruption."
They argue the SEC/FINRA rule does not meet that standard as the mere spending of money in connection with elections doesn't qualify as corruption.
The SEC approved the new rule on Aug. 25 and the State parties filed an appeal in the 60-day window as permitted.
The plaintiffs are represented by H. Christopher Bartolomucci of Bancroft PLLC of Washington D.C.; Jason Torchinsky and Shawn Sheehy, Warrenton, Va.; and Holtxman Vogel; Jose Fiak Torchinsky, Warrenton.
A representative of the SEC did not immediately respond to an emailed request for comment.
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