State AGs Sue SEC Over 'Watered-Down' Broker Conduct Rule

Law360 (September 10, 2019, 11:05 AM EDT) -- A coalition of eight attorneys general has asked a New York federal court to vacate what New York's AG called the U.S. Securities and Exchange Commission’s "watered-down" new regulation governing the standards of conduct for brokers.

In a complaint filed Monday, the attorneys general claimed the SEC overstepped its rulemaking authority when adopting Regulation Best Interest — which bars brokers from putting their own financial interests above their clients' — in violation of the Administrative Procedure Act. The securities regulator failed to hold brokers to higher fiduciary standards imposed on registered investment advisers and require brokers to act in their customers’...

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