Texas judge shoots down latest effort to halt DOL fiduciary rule

Chief Judge Barbara M.G. Lynn denied the financial trade association plaintiffs' motion for an injunction to stop the regulation

Mar 21, 2017 @ 1:18 pm

By Bruce Kelly

+ Zoom

Opponents of the Department of Labor's fiduciary rule were dealt another blow Monday, when a federal judge in Dallas denied their latest effort to halt its implementation.

Chief Judge Barbara M.G. Lynn of the U.S. District Court for Northern Texas denied the financial trade association plaintiffs' motion for an injunction to stop the regulation, which requires financial advisers to act in the best interests of clients in retirement accounts and will become applicable April 10. The trade groups, which include the U.S. Chamber of Commerce, the Securities Industry and Financial Markets Association, and the Financial Services Institute Inc., filed their preliminary injunction earlier this month.

The Labor Department has proposed delaying the rule's implementation while the agency conducts an assessment of the regulation, called for by President Donald J. Trump in a Feb. 3 memo. The DOL received hundreds of letters on the proposed delay through last Friday, when the comment period ended.

(More: DOL issues bulletin to ease confusion over near-term fiduciary rule compliance)

Ms. Lynn cited four factors in her analysis of whether to grant the injunction. The plaintiffs' fell short in each instance, according to the order.

"First, this court has already found the plaintiffs' position on the merits unpersuasive," and two other district courts have reached the same conclusion in similar cases, she wrote.

The trade groups in their preliminary injunction argued three other points, according to Ms. Lynn.

They would suffer irreparable harm without an injunction due to unrecoverable compliance costs because of the April 10 date of the rule. Next, the DOL itself would not be harmed by an injunction. And finally, the public interest favored granting the injunction.

The trade groups failed to meet the burden to satisfy those four factors required to obtain an injunction, according to Ms. Lynn.

SIFMA said it will appeal Ms. Lynn's rejection of the injunction.

"We had anticipated that possibility, but hoped for a different decision," said Ira Hammerman, SIFMA executive vice president and general counsel. "Now we want to get in front of the Fifth Circuit Court of Appeals as quickly as possible."

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

Events

Get creative: How to boost your message to prospects

Communicating with prospects can be difficult. What are some creative ways that you can enhance your messaging? Bob Huntley of Wise Counsel Wealth Management offers some ideas.

Video Spotlight

The Search for Income

Sponsored by PGIM Investments

Recommended Video

Path to growth

Latest news & opinion

T. Rowe Price steps up its game to serve financial advisers

The Baltimore-based mutual fund giant is more aggressively targeting financial advisers with a beefed-up wholesale crew and placement on custodial platforms.

The most important tax changes for 2018

The Internal Revenue Service issued inflation adjustments to more than 50 tax provisions for 2018.

Shift to Roth 401(k)s 'highly likely' part of tax reform: former Treasury official Mark Iwry

Mandated contributions to Roth accounts would likely only be partial, as opposed to having a full repeal of pre-tax accounts.

E*Trade acquiring custodian Trust Company of America

Discount broker buying second-tier custodian for $275 million.

Another thousand Dow points higher, and investors yawn

Market milestones keep falling like dominoes, with 51 records broken so far this year.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print