6/05/2019 — 

WASHINGTON, DC - Today, after the Securities and Exchange Commission (SEC) adopted a package of rulemakings and interpretations related to investment advisers and broker-dealers, U.S. Senator Jack Reed (D-RI), a senior member of the Senate Banking Committee, issued the following statement:

“Having enough savings for retirement is a concern for every American.  Yet, once again, the Trump Administration is undermining consumer and investor protections for those trying to save responsibly.  The SEC’s misleading rules benefit special interests at the expense of mom and pop investors.  Instead of standing up for Americans who are trying to invest their hard-earned savings, the Trump Administration is making it easier for the unscrupulous to mislead retail investors and rack up fees.  What the SEC did today is in the best interest of financial industry lobbyists, not the American people.”

Summary of the SEC’s actions based on excerpts from Commissioner Jackson’s dissent:

•  The rule does not “defin[e] . . . the term ‘Best Interest,’” and in fact goes out of its way to say that it doesn’t “require broker-dealers to recommend [one] ‘best’ product.”

•  The final rule also substantially weakens even the proposal’s limited requirement that firms mitigate the conflicts their brokers face, allowing the conflicts to be resolved through disclosure alone.

•  The final rule invites industry to use new “flexibility” to “use their own wording” in describing themselves to investors, and expressly declines to require firms to disclose every material conflict.