SACRAMENTO – In order to continue defending crucial regulations that require retirement investment advisors to put the interests of their clients above their own financial gain, California Attorney General Xavier Becerra, joined by the Attorneys General of New York and Oregon, has asked the Fifth Circuit Court of Appeals to reconsider its decision denying the States’ motion to intervene. The Obama-era regulations, known collectively as the Fiduciary Rule, enshrined into federal law commonsense standards for professionals who give investment advice to people saving for retirement.
A three-judge panel of the Fifth Circuit Court of Appeals on a vote of 2-1 recently struck down the Fiduciary Rule. As a result, Attorney General Becerra and his fellow Attorneys General filed a motion to intervene before that three-judge panel on April 26, 2018. Their motion was denied, also on a 2-1 vote. Attorney General Becerra and his fellow Attorneys General now are asking the panel to reconsider its decision.
“The Fiduciary Rule is worth fighting for – plain and simple. American families saving their hard-earned money for retirement deserve to know that the investment advice they receive is unbiased and in their best interest,” said Attorney General Becerra. “This is about doing what is right and protecting retirees. We hope to be given the chance to defend the Fiduciary Rule in court.”
The Fifth Circuit’s decision to vacate the Fiduciary Rule will deprive millions of Americans of basic safeguards as they seek financial advice about their retirement investments. It will cost California at least $38 million in lost taxes over the next ten years and will also cost hardworking Americans who are saving for retirement tens of billions of dollars. The Court wrongly held that the Department of Labor lacked authority to require financial advisors for holders of Individual Retirement Accounts to act in their clients’ best interests and the decision conflicts with decisions of three other courts, including the Tenth Circuit Court of Appeals, that have upheld the Fiduciary Rule.
Since taking office, Attorney General Becerra has made protecting consumers a top priority. Among other actions, he has filed a lawsuit against Sutter Health, the largest hospital system in Northern California, for anticompetitive practices that result in higher healthcare costs for Northern Californians; announced a $125 million settlement with the Royal Bank of Scotland over misrepresentations about residential mortgage-backed securities sold to California's public employee and teacher pension funds; and has sued the Federal Communications Commission over its attempt to repeal net neutrality rules, which allow consumers to access online content without any interference by an internet service provider.
A copy of the Motion for Reconsideration is attached to the electronic version of this release at oag.ca.gov/news.