Class Action

Ponzi Schemes

Latest News


SIFMA nudging SEC to implement uniform fiduciary standard of care

SIFMA nudging SEC to implement uniform fiduciary standard of care

T. Timothy Ryan Jr., president and chief executive of SIFMA, told reporters he wants constructive dialogue to begin as soon as possible on this issue to eliminate current uncertainties.

One of the most influential Wall Street lobbying organizations, SIFMA listed the fiduciary-duty rule as one of its top three priorities for 2013. According to Schoeff, SIFMA’s openness toward a uniform standard has heartened some fiduciary advocates, who said that it shows that Wall Street is amenable to raising the bar for brokers.

Schoeff points out that the Dodd-Frank financial reform law gives the SEC the authority to implement a rule that would subject brokers to the same fiduciary standard for retail investment advice that investment advisers must now meet. Currently, brokers adhere to a less stringent suitability standard.

He also said a potential uniform fiduciary duty rule has been stalled at the SEC for two years.

According to the article, Kenneth E. Bentsen Jr., SIFMA’s executive vice president for public policy and advocacy, said that during the first quarter, the SEC will issue a request for information for a cost-benefit analysis related to the fiduciary rule.

Bentsen acknowledged that progress on fiduciary duty will have to overcome a big political obstacle – the SEC is currently missing a member and is split 2-2 along party lines. However Bentsen believes with a fifth commissioner in place, that “there is a will in the commission and among our members” to implement the fiduciary regulation.

Scheoff cited a comment made by SEC Commissioner Daniel Gallagher, that the fiduciary duty rule would be “easy to prioritize,” if SEC Chairman Elisse Walter chose to do so This is because of the amount of work SEC staff has put into developing a rule.

According to Schoff, Mr. Gallagher cautioned that the commission should proceed carefully since the uniform fiduciary standard is not mandated by the Dodd-Frank Section 913 authority.

SIFMA points out that that a uniform standard should be sensitive to the characteristics of the brokerage industry and should not subject brokers to the 1940 Investment Advisers Act.

Schoeff quotes Chet Helck, SIFMA’s chairman, and chief executive of Raymond James Financial Inc’s Global Private Client Group, who said that brokers today wear multiple hats — sometimes advising clients on investments and sometimes selling investment products. Yet, Heck believes the standards should be the same.

Speaking to the unified standard issue, Scott Starr, securities fraud attorney at  Starr Austen & Miller LLP, said, “I feel very strongly that ALL investment advisors — whether they be brokers, RIA’s, insurance salespeople or whoever — be held to fiduciary duties requiring them to put the interests of their clients ahead of their own.”

Located in Logansport, Ind., Starr Austen & Miller LLP has a team of investment fraud lawyers who handle cases involving securities arbitration misrepresentation, overconcentration, broker fraud, negligence, churning , breach of trust claims, as well as malpractice.