In their complaint, the Attorneys General are asking the U.S. District Court for the Southern District of New York to scrub Regulation Best Interest, the SEC's recently passed standard of care rule for broker-dealer recommendations to retail investors.
Their complaint alleges that the SEC acted outside the instructions of Congress established in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
|Harm to states and their residents
The states and the District of Columbia have standing to sue, according to the complaint, because of the harm they and their residents will suffer under Reg BI, which does not go far enough to alleviate consumer confusion over the different obligations of registered investment advisors and broker-dealers, or reduce brokers' from offering conflicted advice.
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