Competitive Enterprise Institute issued the following announcement on April 18.
In the wake of a court ruling against a controversial Obama-era Labor Department rule expanding liability for investment advice, the Securities and Exchange Commission today is expected to offer its own version of such a rule. CEI senior fellow John Berlau hopes for a better result that does not once again disadvantage middle class investors:
Today, the Securities and Exchange Commission is poised to propose a “fiduciary rule” mandating that brokers serve the “best interest” of investors. We hope that this rule will differ from that of the Department of Labor (DOL), recently struck down by a federal appeals court, and preserve investors’ choices and access to financial advice while protecting them from fraud and deception. As with the DOL rule, we will examine this proposed rule closely and inform the public and the SEC of ways the rule could be modified and improved.
Unlike the DOL, the SEC is specifically authorized by Congress to issue a fiduciary rule for the brokerage industry. In sidestepping the SEC, the Obama Department of Labor ignored the intent of Congress and issued a rule that curtailed options for investors and that the 5th Circuit Court of Appeals deemed “arbitrary and capricious” in striking it down.
The Trump administration should not appeal the 5th Circuit decision and should let the Obama rule expire so that it no longer curtails the wealth-building of investors and entrepreneurs.
Original source can be found here.
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