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January 6, 2020

Better Markets and the Consumer Federation of America File A Brief Supporting the Legal Challenge to the SEC’s Unlawful and Misleading Rule That Will NOT Put a Stop to Conflicted Financial Advice


Monday, January 6, 2020

Contact:  Christopher Elliott, 202-618-6433

Washington, D.C.  –  Stephen W. Hall, Legal Director and Securities Specialist for Better Markets, issued the following statement about the amicus brief filed by Better Markets and the Consumer Federation of America (CFA) in support of a legal challenge to the SEC’s “Regulation Best Interest:”

In June last year, the SEC adopted its so-called “Regulation Best Interest,” proclaiming that it would protect investors from the rampant conflicts of interest among broker-dealer advisers that cost everyday American investors tens of billions of dollars a year in lost savings.  But it was nothing more than a sleight of hand.  In reality, the rule preserves the status quo, maintaining two different legal standards for the same advisory conduct.  In addition, it leaves investors not only bewildered still about what standards apply to their advisers but also still vulnerable to advisers who will be allowed to continue recommending high-priced, low-performing investments to line their own pockets with huge fees and commissions.  And it even makes the problem worse by misleading investors into thinking that they are receiving protections that aren’t really there.

A group of financial planners—who are subject to a higher duty under the law as registered investment advisers—and a group of states rightly challenged the rule in the U.S. Court of Appeals for the Second Circuit.  On Friday, January 3, 2020, Better Markets and the Consumer Federation of America joined together and filed a “friend of the court” brief siding squarely with the challengers and urging the court to invalidate the rule.  Better Markets also released a Fact Sheet today summarizing the grounds on which the court should invalidate the rule.

Better Markets and the CFA argue that the rule violates the letter and spirit of the Dodd-Frank Act, in which Congress gave the SEC clear authority to adopt a strong, uniform fiduciary standard for all advisers—broker-dealers and registered investment advisers alike.  The brief also highlights the enormous and well-documented harm that conflicts of interest among broker advisers are inflicting on investors, siphoning away the hard-earned money they have set aside for retirement, their children’s college education, or other financial goals.  And the brief shows that the SEC acted arbitrarily and capriciously under the law by accepting the brokerage industry’s bogus and unsupported claim that a truly strong and uniform standard for all advisers would hurt investors by depriving them of choice.  In reality, the SEC caved to the industry, and it did so at expense of the very people it was established to protect: millions of investors who are vulnerable to harmful adviser conflicts of interest.


Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit

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