Litigation schedule set for suits against DOL fiduciary rule

Litigation schedule set for suits against DOL fiduciary rule
The plaintiffs and Labor Department are seeking summary judgment for the cases in a Dallas federal court, with a decision possible in October.
JUN 23, 2016
Financial industry trade groups and the Department of Labor have agreed to a litigation schedule that could render a decision in October on several lawsuits seeking to stop an investment advice regulation. The plaintiffs and the DOL are seeking summary judgment for the cases in a Dallas federal court. Briefs would be filed at various dates in July, August, September and into the middle of October. “The parties agree that the cases should be decided expeditiously on cross-motions for summary judgment without discovery or any other evidentiary proceedings,” a June 24 joint motion states. The plaintiffs' opinion continued: “There is good cause for the expeditious resolution of this litigation. Among other things, plaintiffs and/or many of their members will incur significant costs and challenges in endeavoring to comply with the Department's rulemaking by April 2017 (the applicability date for most provisions of the rule).” (More: Everything you need to know about the DOL fiduciary rule as it develops) Chief Judge Barbara M.G. Lynn has not yet ruled on the motion. In a separate order on June 21, Ms. Lynn consolidated three suits that were filed in the U.S. District Court for the Northern District of Texas. One of them involves nine co-plaintiffs, including the Securities Industry and Financial Markets Association, the Financial Services Institute and the U.S. Chamber of Commerce. Another one was filed by the American Council of Life Insurers and the National Association of Insurance and Financial Advisors. A third was filed by the Indexed Annuity Leadership Council. Two other suits are also in the court system. One was filed in the Washington, D.C., federal court by the National Association of Fixed Annuities. The other was filed in the Kansas district court by Market Synergy Group. A hearing on summary judgment in the NAFA litigation has been set for Aug. 25. Each of the suits aims to kill the DOL rule, which was finalized in April and requires financial advisers to act in the best interests of their clients in retirement accounts. The plaintiffs argue the rule would significantly raise regulatory costs and legal risks for financial advisers and make advice too expensive for investors with modest assets. The Obama administration asserts that the rule will protect workers and retirees from conflicted advice that results in the sale of high-fee investments that erode savings. In a June 22 appearance at the National Press Club in Washington, Labor Secretary Thomas Perez expressed confidence that the regulation will withstand the court challenges. (Correction: An earlier version of this story incorrectly stated that Judge Lynn had already granted the joint motion.)

Latest News

JPMorgan tells fintech firms to start paying for customer data
JPMorgan tells fintech firms to start paying for customer data

The move to charge data aggregators fees totaling hundreds of millions of dollars threatens to upend business models across the industry.

FINRA snapshot shows concentration in largest firms, coastal states
FINRA snapshot shows concentration in largest firms, coastal states

The latest snapshot report reveals large firms overwhelmingly account for branches and registrants as trend of net exits from FINRA continues.

Why advisors to divorcing couples shouldn't bet on who'll stay
Why advisors to divorcing couples shouldn't bet on who'll stay

Siding with the primary contact in a marriage might make sense at first, but having both parties' interests at heart could open a better way forward.

SEC spanks closed Osaic RIA for conflicts, over-charging clients on alternatives
SEC spanks closed Osaic RIA for conflicts, over-charging clients on alternatives

With more than $13 billion in assets, American Portfolios Advisors closed last October.

William Blair taps former Raymond James executive to lead investment management business
William Blair taps former Raymond James executive to lead investment management business

Robert D. Kendall brings decades of experience, including roles at DWS Americas and a former investment unit within Morgan Stanley, as he steps into a global leadership position.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.