NEW YORK (Reuters) - Attorneys general from California, Oregon and New York on Thursday filed a motion to intervene in a case between the securities industry and the U.S. Department of Labor, petitioning the full 5th U.S. Circuit Court of Appeals to revisit its earlier decision on a rule governing investment advice for retirees.
The court, in a 2-1 decision in March, found in favor of the U.S. Chamber of Commerce, the Securities Industry Financial Markets Association and others that argued that the DOL’s fiduciary rule was too burdensome. They said the rule could limit the availability of retirement investment advice because wealth management firms would have to raise their prices.
In their motion to intervene and petition for rehearing by the full 17-judge court, the attorneys general said the three-judge panel was wrong in finding that the DOL did not have authority to require brokers to put their clients’ interests first when advising on individual retirement accounts.
“The Fiduciary Rule is an important measure that protects and empowers retiring workers, for whom every dollar is crucial,” California Attorney General Xavier Becerra said in a statement. “American families saving their hard-earned money for retirement deserve to know that the advice they receive is unbiased and in their best interest.”
The Chamber of Commerce, SIFMA and other industry groups that argued against the DOL said in a statement that they will “oppose any motion to intervene in this case at this late stage.”
“The 5th Circuit got it right in its March 15, 2018, opinion striking the DOL fiduciary rule in toto,” the group said.
Earlier this month, the U.S. Securities and Exchange Commission released its own proposal for a rule meant to replace the DOL’s rule that would require brokers to act in the best interest of the customer.
The proposed SEC rule is currently open to a 90-day public comment period.
Reporting By Elizabeth Dilts; Editing by Dan Grebler