The IBD filed a notice to appeal with the First Circut Court of Appeals after a Massachusetts federal judge ruled in favor of the Securities and Exchange Commission.
According to the settlement letter, third parties used the firm’s cash management brokerage account to withdraw funds from accounts they’d illegally accessed at other financial institutions.
The Federation of Americans for Consumer Choice and several co-plaintiffs claim the Department of Labor wants to “fundamentally reshape” settled industry practices.
The brokerage regulator argued the firm’s automated process for approving options traders on its self-directed platform missed instances where clients submitted applications with conflicting information.
Advocates say RIAs have little to worry about, yet one opponent accused the DOL of waging an “ideological crusade” and said he’d recommend litigation to his board.
