XYPN also argued that Reg BI allows a broker-dealer to consider its own personal interests in providing recommendations and advice to investors on how to invest their life savings. “This new rule means that broker-dealers may maintain harmful conflicts of interests while being able to market themselves as trusted advisers acting in their client’s best interests,” XYPN wrote.
The rule “thus circumvents a key goal of Dodd-Frank — leveling the playing field — and increases investor confusion,” he added.
In addition to Waters, Dodd and Frank, Sen. Sherrod Brown (D-Ohio) and Reps. Wm. Lacy Clay (D-Mo.), Al Green (D-Texas), Stephen Lynch (D-Mass.), Carolyn Maloney (D-N.Y.), Jerrold Nadler (D-N.Y.), Katie Porter (D-Calif.), and Jan Schakowsky (D-Ill.) are included on the amicus brief, along with former Rep. Paul Kanjorski (D-Pa.).
Better Markets, Inc., the Consumer Federation of America, the Financial Planning Association, and the Public Investors Arbitration Bar Association have also submitted amicus briefs.
The SEC has asked the appeals court to set the due date for the SEC’s response brief to March 3, 2020, giving the regulator until that date to reply to the XYPN and state AG petition.