In a complaint filed this week, a group of seven states (plus the District of Columbia) sued the SEC for having adopted a rule that allegedly does not comply with the mandate in the 2010 Dodd-Frank law for broker-dealers to make recommendations “without regard to” the broker-dealers’ own interests, similar to the fiduciary obligation investment advisers owe their clients.

The standard the SEC adopted instead — that broker-dealers cannot put their interests “ahead of the interest of the retail customer” — is below the standard required by law, according to the complaint, for multiple reasons:…
Continue Reading Group of States Challenge SEC Rule Setting Standard of Care Broker-Dealers Owe Customers