Managing Director Ken Joseph, in the Disputes and Investigations practice, was quoted in an article in Ignites titled "SEC to Courts: Clashing Reg BI, State Rules Are Your Problem Now".
The SEC did not spell out whether it intends for its now-finalized broker advice rule to take precedence over state regulations that may impose higher standards of care, and industry groups will likely ask courts to rule that it does, lawyers say.
Last week, the Securities and Exchange Commission voted 3-1 to adopt “Regulation Best Interest,” which becomes enforceable next June. The rule stipulates that brokers must follow four principles when disseminating investment advice: Adopt a “best interest” standard of care; provide disclosures on fees, scope of services and other details regarding the broker-client relationship; mitigate or eliminate conflicts of interest; and develop compliance-focused policies and procedures.
These provisions run counter to those contained in rule proposals put forth by some state securities regulators over the past few years.
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