California and seven other states - including New York, Delaware, and D.C.'s challenge to the SEC best Interests Rule is being briefed befoe the Second Citcuit. The States explain in their complaint:
This lawsuit challenges a final regulation issued by the Securities and Exchange Commission that undermines critical consumer protections for retail investors, increases confusion about the standards of conduct that apply when investors receive recommendations and advice from broker-dealers or investment advisers, makes it easier for brokers to market themselves as trusted advisers (while nonetheless permitting them to engage in harmful conflicts of interest that siphon investors’ hard-earned savings), and contradicts Congress’s express direction. Regulation Best Interest: The Broker-Dealer Standard of Conduct, 84 Fed. Reg. 33,318 (July 12, 2019) (the “Final Rule”).Business Law Prof Blog notes:
After the parties filed their briefs on December 27, the amicus front heated up. The Public Investors Arbitration Bar Association filed an amicus brief citing some academic works by Rutger's Arthur Laby, and St. John's Christine Lazaro. Better Markets and the Consumer Federation also filed an amicus brief--also citing influential work by Arthur Laby. Even former members of congress--notably Dodd and Frank have weighed in arguing that the SEC misread Dodd-Frank.
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