Another year, another fiduciary rule.
And another court fight over it.
The Department of Labor released its final version of the Biden administration’s fiduciary rule in April, stating that financial institutions “overseeing investment advice providers” must have policies and procedures in place to manage conflicts of interest and ensure that their providers follow the guidelines.
By July, a Texas federal court temporarily halted he rule’s enforcement, arguing that it “suffers from many of the same problems” as a previously vacated version of a fiduciary standard for insurance professionals proposed during the Obama administration.
With Donald Trump winning the 2024 presidential election, it’s likely the new administration would try their hand (again) at creating one of their own.
While that was going on, SEC enforcement faulted firms for not adequately supervising advisors’ use of WhatsApp and other "off-channel" communications, with the regulators levying billions of dollars in fines.
Also in April, the SEC fined 26 firms nearly $400 million for “widespread and long-standing failures” to maintain electronic communications. Enforcement of the commission's ad rule and Reg BI continued as well.
FINRA found itself in the courts amid a battle with advisory firms over its legality. In November, a circuit court ruled that FINRA cannot speedily expel reps without SEC oversight, a ruling stemming from a court fight with Alpine Securities, which argued that FINRA’s entire existence is unconstitutional.
There was more. The FTC banned noncompete agreements (also stayed by the courts), and the Supreme Court ruled that the SEC’s use of in-house administrative law judges violated the Constitution’s guarantee of a jury trial clauses.
Take a look back at all the top regulatory stories of the year in this year in review.
