Stein said the SEC’s failure to create a fiduciary standard for brokers was particularly painful after listening week after week to SEC examiners report back on findings of broker fraud.
“Does this regulatory proposal require B-Ds to put their investors interest first? No,” Stein said. “Does this proposal require all financial professionals to do so as fiduciaries? No. “Does this proposal require brokers to provide retain investors with the best available investment options? No.”
The SEC could have proposed a best-interest rule that did all of these things, Stein said. “Unfortunately, today we are not. ... Because there is no definition of best interest in the proposal, the name of the rule in and of itself is confusing. Perhaps it would be more accuratate to call this ‘Regulation Status Quo,’” Klein added, before voting against the proposals.