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Seven states and the District of Columbia are suing the Securities and Exchange Commission, saying it failed to protect consumers in its Regulation Best Interest rule.
The suit, filed in the Southern District of New York Monday, includes New York, California, Oregon, Connecticut, Delaware, Maine and New Mexico.
The 36-page complaint alleges that the final rule, “undermines critical consumer protections for retail investors, increases confusion about the standards of conduct that apply when investors receive recommendations and advice from broker-dealers or investment advisers, makes it easier for brokers to market themselves as trusted advisers (while nonetheless permitting them to engage in harmful conflicts of interest that siphon investors’ hard-earned savings), and contradicts Congress’s express direction.”
More than two-thirds of US investors fear a recession is looming, according to a survey. Those fearing a recession want to convert part of their stock portfolios to comparatively safer investments or hedge with commodities, real estate or cryptoassets.
The survey conducted by eToro, a global trading platform, found that respondents cited the ongoing trade conflict between the United States and China — as well as challenges with Mexico — as the most prevalent geopolitical factors that will impact their portfolios over the next six months.
Guy Hirsch of eToro said: “As global markets experience heightened volatility and as geopolitical tensions escalate, investors are seeking stability outside of the traditional stock market. Investors across all demographics are looking to empower themselves financially by diversifying their portfolio with new asset classes and exploring novel forms of ownership.”
The Independent Insurance Agents and Brokers of New York filed an appeal Monday challenging a New York Supreme Court ruling upholding the state’s new regulations governing annuity and life insurance sales.
Acting Albany County Supreme Court Justice Henry Zwack ruled July 31 that the New York Department of Financial Services was within its authority when it issued Regulation 187. The regulations establish a best interest sales standard and include rigorous training and documentation rules.
Regulation 187 took effect Aug. 1 for all annuity sales in New York.
The National Association of Insurance and Financial Advisors – New York also sued to stop Regulation 187. But the NAIFA chapter opted not to join the appeal, sources said.
The IIABA, known as The Big I, released the following statement:
“Big I New York has filed notice of our intent to appeal the Albany Supreme Court’s recent ruling upholding the amendment to Regulation 187. Independent agents and brokers believe strongly in protecting the customers who put their trust in us. However, we remain concerned that the amended regulation will not meaningfully advance this goal. Instead, it will restrict open, honest discussions with clients and weaken the market for life insurance and annuities products, ultimately harming consumers.
“Our concerns about the impact of this regulation are already being borne out. Since the regulation went into effect on August 1st, multiple carriers with significant market share have announced the suspension of the sale of annuities and life insurance products in the state. We believe this concerning trend is likely to continue.
“From the outset, we recognized that this legal challenge would likely be appealed to a higher court, regardless of the trial court’s decision. We remain confident in the merits of our claims, and resolute in our belief that this is the appropriate course of action.”