One of Donald Trump's top Wall Street supporters — and a recently named adviser to the campaign — promises that the Republican presidential nominee will rip up a Labor Department investment advice rule if he is elected.
Anthony Scaramucci, managing partner of SkyBridge Capital, said the measure, which requires financial advisers to act in the best interests of their clients in retirement accounts, is an example of government overreach that would divert too much capital into low-cost passive ETFs and index funds.
“We're going to repeal it,” Mr. Scaramucci said on the sidelines of the
Securities Enforcement Forum in Washington last week. “It could be the dumbest decision to come out of the U.S. government in the last 50 to 60 years.”
In an aside, Mr. Scaramucci compared the DOL rule to an 1857 Supreme Court ruling which held that African Americans were not U.S. citizens.
“It's about like the Dred Scott decision,” Mr. Scaramucci said.
He made the analogy because he views the DOL rule as discriminatory, Mr. Scaramucci wrote in a follow-up email.
“The left-leaning Department of Labor has made a decision to discriminate against a class of people who they deem to be adding no value,” he wrote. “They are judging what should happen in a free market and attempting to put financial advisers out of work. When market forces cyclically adjust again, they will be having congressional hearings about how big the mistake was to do this.”
The Trump campaign has not responded to any of several requests for comment on the DOL rule, including one related to Mr. Scaramucci's comments.
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Mr. Trump has said publicly that he intends to roll back many regulations. He has not specifically addressed the DOL rule.
Mr. Scaramucci, who last week was named a
small-business adviser to Mr. Trump, said there is overregulation in capital markets.
“At the end of the day, Wall Street is a circulatory system of capital,” Mr. Scaramucci said during a conference panel he moderated. “If you're constraining it through this excess regulation, you're just going to get less growth.”
A former Securities and Exchange Commission member, Daniel Gallagher Jr., said the election outcome will have a profound effect on financial regulation.
He stopped short of endorsing a candidate, but asserted that Democratic nominee Hillary Clinton would expand on the Dodd-Frank financial reform law, while Mr. Trump would rein it in.
“The types of people that I believe will be appointed in the Hillary Clinton world versus, perhaps, the Donald Trump world is radically different,” Mr. Gallagher, president of Potomak Global Partners, said at the conference. “To the extent you think there's been overregulation, to the extent you think Dodd-Frank has been a disaster, that's going to be a heck of a lot different if you get a free-market conservative running the SEC than it will be if we get a very regulatory, nanny-state non-revolving-door [chairperson] … running the SEC.”
