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[Tovarisc]

A U.S. federal judge on Wednesday upheld an Obama-era rule designed to avoid conflicts of interests when brokers give retirement advice, in a possible setback for President Donald Trump's efforts to scale back government regulation.

The stinging 81-page ruling comes just days after Trump ordered the Labor Department to review the "fiduciary" rule - a move widely interpreted as an effort to delay or kill the regulation.

The decision by Chief Judge Barbara Lynn for the U.S. District Court for the Northern District of Texas is a stunning defeat for the business and financial services industry groups that had sought to overturn it.

And while it is not expected to stop the Labor Department from delaying the rule's April 10 compliance deadline while it conducts the review, some legal experts say it could make it more difficult for the Labor Department to find a way to justify scrapping or significantly altering the rule.

......

“Three courts have now carefully considered the full range of industry attacks on the DOL’s best interest fiduciary rule, and they have firmly rejected all of them," said Stephen Hall, the legal director of Better Markets, a non-profit group that supports the rule.

......

The Labor Department's "fiduciary" rule requires brokers to put their clients' best interests first when advising them about individual retirement accounts or 401(k) retirement plans.

......

The decision in the Labor Department's favor came just a few hours after the Justice Department had petitioned the court to stay issuing a ruling because of the Feb. 3 White House request to review the rule to determine if it should be revised or scrapped.

......

Lynn also rejected other arguments, including claims that the rule violated free speech rights of brokers and that the rule violated federal laws governing arbitration.

The case could still be appealed to a higher court.

Source: http://www.reuters.com/article/us-usa-labor-fiduciary-idUSKBN15N2HF

Lynn was appointed by Clinton.

 

[Stinkles]

brokers are people my friend.

 

[studyguy]

brokers are people my friend.

You're infringing on my right to free speech by refusing to allow me to line my pockets at the expense of my clients!!!

 

[Red]

You're infringing on my right to free speech by refusing to allow me to line my pockets at the expense of my clients!!!

You could call it economic terrorism.

 

[Elaugaufein]

The idea that someone your literally paying for advice on a subject should not be obligated to put your best interests first (other than things like their safety from harm) is one of the more insane ideas that have come out of a certain economic view which seems to think the acquisition of personal wealth is the only moral good. How the hell does anyone think you can have a functional society if you can't expect people to do what you're contracting with them for ?

 

[metalslimer]

Can someone explain please the non complete greed explanation as to why this rule is bad

 

[Icebergslim]

I see the courts are the only thing truly keeping America from being a complete and total Plutocracy.

 

[SocksAndShoes]

Can someone explain please the non complete greed explanation as to why this rule is bad

That explanation doesn't exist.

 

[Morts]

Nice.

 

[newshinycd]

Can someone explain please the non complete greed explanation as to why this rule is bad

Obama Administration created it. So obviously its a bad deal. /s

 

[Horns]

Good.

 

[Maxim726X]

See? There are barriers in this country that Trump has to overcome before he goes full fascist.

Glad to see the courts putting their feet on his throat.

 

[RumblingRosco]

Judges and the court system are saving this country this week.

 

[Ron Mexico]

Can someone explain please the non complete greed explanation as to why this rule is bad

Not saying I agree or necessarily know what it would look like, but I think the idea was for FINRA (or the like) to be given enough latitude to make their own fiduciary agreements.

Again, this was also sold in the poorest way possible. Of all the financial rules that need another pass (and there are plenty imo), this one doesn't hold as much weight for me.

 

[GregLombardi]

 

[Red]

Can someone explain please the non complete greed explanation as to why this rule is bad

The only real criticism I've seen is that it might cause clients to receive less advice (since they aren't supposed to receive bad advice under the real). Opponents of the rule argue that more information is better, even given bad information.

 

[Nepenthe]

The judicial branch has been on fire recently.

 

[jelly]

More good news. Excellent.

 

[Mivey]

Can someone explain please the non complete greed explanation as to why this rule is bad

That somehow this hinders them to buy or invest into more risk assets, is therefore stifling ... something? I mean, financial industry is certainly doing fine now, so I don't know how this ``explanation'' is supposed to make sense.

 

[Cess007]

Judges and the court system are saving this country this week.

This is what? 0-4 against Judges from the Trump administration?

 

[TheOMan]

Can someone explain please the non complete greed explanation as to why this rule is bad

There isn't a way to do that without lying.

 

[Dineren]

Someone correct me if I'm completely wrong, but reading the story it appears that this suit was filed independently of Trump and the DoL can still just scrap this rule if they want to. Is that correct? Is there anything actually stopping the DoL from eventually killing the rule aside from it looking bad?

 

[UnemployedVillain]

I guess checks and balances actually are working! Thank you judicial branch!

 

[Ziltoidia 9]

We went through 8 years of being told Obama is the most unconstitutional president ever, yet Trump is the one that is blocked constantly the first few weeks in office.

Obama wasn't blocked once, was he? Thats what being a constitutional lawyer gives you.

 

[sc0la]

The judicial branch has been on fire recently.

Don't give the Donald any ideas.

 

[SwiftDeath]

Can someone explain please the non complete greed explanation as to why this rule is bad

Fiduciary is hard to say and even harder to spell, if we simply remove the requirement than brokers can spend more time focused on making everyone money and less time on spelling and pronunciation.

Don't you want the economy to grow? What are you a commie liberal?

 

[thespot84]

If you subscribe to the point of view of neoliberals like the economist they'll tell you that rules like these are necessary but overly complex. I don't know where the right middle ground is, but it does seem arduous to comply with the Volker rule at 300+ pages, when in essence it just means "banks should not do proprietary trading". I imagine there is similar sentement for the fiduciary rule, though I don't know how long that one is and how much time and money it takes to comply.

 

[Angelus Errare]

Can someone explain please the non complete greed explanation as to why this rule is bad

Is the free market really free when the gubament dictates whether or not I'm allowed to make money by taking advantage of someone who didn't research properly to make sure they weren't getting scammed?! The guverment needs to stop coddling these snowflakes!

 

[The Jackdog]

Can someone explain please the non complete greed explanation as to why this rule is bad

their justification for it is that a fiduciary is forced to make very simple, weak, and basic financial decisions that dont end up making as much as more risky endeavors.

Like they are "held back" from making their clients the most money.

 

[Pai Pai Master]

It feels so fucking good to see him taking these Ls

 

[Man-is-Obsolete]

Can someone explain please the non complete greed explanation as to why this rule is bad

Republican's spin is that it harms the free market and reduces the options given to people. A lot of those options would include high risk-high reward options seen as bad advice currently, but they argue those options can yield great results for the investor and the economy. Much like everything else they like to assume companies will always have their clients' best interest in mind. Because without this regulation in place they could swing the other way and not offer good advice at all.

 

[Elaugaufein]

their justification for it is that a fiduciary is forced to make very simple, weak, and basic financial decisions that dont end up making as much as more risky endeavors.

Like they are "held back" from making their clients the most money.

This isn't true though, we have a fiduciary best interest rule in my country, my financial advisor was quiet happy to tell me that risky options have the best long term rewards on average but to diversify them and that they are poor short term investments because of their uncertainty.

Advising someone who's 30 to put their investment in high risk, high return, with higher average return than safer funds for the next say 20 years is acting in their best interest. Giving that advice to someone retiring next year is grossly irresponsible.

 

[sangreal]

their justification for it is that a fiduciary is forced to make very simple, weak, and basic financial decisions that dont end up making as much as more risky endeavors.

Like they are "held back" from making their clients the most money.

the rule is about conflict of interest, not risk

they can't shuttle clients into unsuitable investments that benefit themselves more than the client

 

[SomewhatGroovy]

The idea that someone your literally paying for advice on a subject should not be obligated to put your best interests first (other than things like their safety from harm) is one of the more insane ideas that have come out of a certain economic view which seems to think the acquisition of personal wealth is the only moral good. How the hell does anyone think you can have a functional society if you can't expect people to do what you're contracting with them for ?

What guarantees do you think, idealistically, are in place to ensure any professional (advisor, contractor, carpenter, AC repair man...) have your best interests at heart?

Like anyone else, advisors want to have a long run at this. The best way to do that is to have repeat business. Advisors and compliance teams every have been working as fiduciaries for decades. Yes, there have been outliers and , yes, they've been caught, barred from industry and in a lot of cases put in jail. If, eventually, they are caught with their pants down, they get taken to court , sued, and kicked out of the industry. The DOL rule doesnt change that. FINRA , the SEC, compliance teams for products and firms all have checks and balances in place. That's 4 layers of security.

The DOL hurts more than it helps because, now, the rise in costs to excute the rule has bumped costs up. More people need to be hired, more paperwork. What this means is, in turn, is that profit margins need to be protected. How do you think that happens? Firms will come out and take the option away from the client as to how they're going to pay for their services going forward.

The story about how Firms are upset with this rule is a joke perpetuated by the media. The reality is, firms have been pushing for fee-based only advise for well over a decade and are using the DOL to tell advisors how to run their business and telling clients' how they will pay for it. These fucking companies are going to be making more money!

This rule has done nothing to protect the client anymore than they were a year ago but has given firms the means to fuck the clients over even further. There's some irony for you to give thought to.

 

[Vixdean]

The nice thing about Obama's executive and legislative actions is that they were actually properly vetted by both legal experts and the agencies responsible for implementing them. Overturning them on a whim is going to be a non-starter in a lot of cases.

 

[GoldenEye 007]

We went through 8 years of being told Obama is the most unconstitutional president ever, yet Trump is the one that is blocked constantly the first few weeks in office.

Obama wasn't blocked once, was he? Thats what being a constitutional lawyer gives you.

He's had some stuff blocked. Notably regarding immigration issues. Also, ACA has partially been gutted by the courts. Like birth control mandate being removed on religious grounds.

http://www.forbes.com/sites/danielf...-block-trumps-immigration-order/#7bd062424d37

Ironic, though, that the same ruling that blocked Obama's rule was cited in blocking Trump's EO.

 

[CHC]

Is it wrong to just want a government made only of judges at this stage?

As of right now they are quite literally the only thing standing between us and the pseudo-fascist, white capitalist Wild West wet dream.

 

[demosthenes]

Excellent. I'm worried that all of these setbacks to trump might get home to launch a war on the courts.

 

[Elaugaufein]

Is it wrong to just want a government made only of judges at this stage?

As of right now they are quite literally the only thing standing between us and the pseudo-fascist, white capitalist Wild West wet dream.

It would probably advance very slowly given that judges are generally chosen for their adherence to existing societal standards (ie the law), so it's maybe not an ideal thing on that level. I'm assuming you're not including the bureaucracy either since judges probably aren't experts on say energy policy, either, so you'd still need advisors , etc.

 

[Ziltoidia 9]

He's had some stuff blocked. Notably regarding immigration issues. Also, ACA has partially been gutted by the courts. Like birth control mandate being removed on religious grounds.

http://www.forbes.com/sites/danielf...-block-trumps-immigration-order/#7bd062424d37

Ironic, though, that the same ruling that blocked Obama's rule was cited in blocking Trump's EO.

Ah, alright, thanks for the info. I guess I didn't remember this stuff because Obama didn't flap around and have a baby tantrum because of it.

 

[thespot84]

What guarantees do you think, idealistically, are in place to ensure any professional (advisor, contractor, carpenter, AC repair man...) have your best interests at heart?

Like anyone else, advisors want to have a long run at this. The best way to do that is to have repeat business. Advisors and compliance teams every have been working as fiduciaries for decades. Yes, there have been outliers and , yes, they've been caught, barred from industry and in a lot of cases put in jail. If, eventually, they are caught with their pants down, they get taken to court , sued, and kicked out of the industry. The DOL rule doesnt change that. FINRA , the SEC, compliance teams for products and firms all have checks and balances in place. That's 4 layers of security.

The DOL hurts more than it helps because, now, the rise in costs to excute the rule has bumped costs up. More people need to be hired, more paperwork. What this means is, in turn, is that profit margins need to be protected. How do you think that happens? Firms will come out and take the option away from the client as to how they're going to pay for their services going forward.

The story about how Firms are upset with this rule is a joke perpetuated by the media. The reality is, firms have been pushing for fee-based only advise for well over a decade and are using the DOL to tell advisors how to run their business and telling clients' how they will pay for it. These fucking companies are going to be making more money!

This rule has done nothing to protect the client anymore than they were a year ago but has given firms the means to fuck the clients over even further. There's some irony for you to give thought to.

If a contractor fucked up work on my house I can tell within a matter of days weeks or maybe months. That gives me plenty of time to get the word out about how bad he is so nobody else hires them. In the case of a fiduciary, I can't tell if they did a good job for me until decades later. The feedback loop simply doesn't exist when time scales are that long for the free market to provide a necessary correction mechanism.

 

[ShyMel]

Lynn also rejected other arguments, including claims that the rule violated free speech rights of brokers and that the rule violated federal laws governing arbitration.

What a nasty person you have to be to think that brokers needing to have the best interest of the clients in mind violates their right to freedom of speech.

 

[CrunchyFrog]

The idea that someone your literally paying for advice on a subject should not be obligated to put your best interests first (other than things like their safety from harm) is one of the more insane ideas that have come out of a certain economic view which seems to think the acquisition of personal wealth is the only moral good. How the hell does anyone think you can have a functional society if you can't expect people to do what you're contracting with them for ?

I would classify it as false advertising, in the same vein as nutritional supplements claiming to make you lose 60 pounds in a month. I think it should be implied in any business transaction that the seller has the best interests of their client at heart.

 

[AndyD]

The only real criticism I've seen is that it might cause clients to receive less advice (since they aren't supposed to receive bad advice under the real). Opponents of the rule argue that more information is better, even given bad information.

That and some people might want to take higher risk options, but with the rule they won't know about the higher risk options.

I don't understand how brokers can't just disclose the higher risk, enabling better choices, but I'm not in finance.

 

[Glix]

I had this talk with my friend the other night. It basically went like this.

You are the supposed experts. If you tell me that that I put my money in an investment that is 1% less safe then the one that would be best for me, because it is 20% better for the organization you work for, which in turn, would be very good for me as a customer, I would be inclined to believe you. Or at least.. it is a reasonable conversation we could have.

But I no longer trust your organization or any of the ones like it. You completely and utterly betrayed our trust and even AFTER, are still aggressively doing it (see Wells Fargo)

So NO. You don't get to have the regulations taken away. We need to be protected. You haven't done ONE THING to help us or to regain our trust.

Its so fucking arrogant. Or childish. Or both.

It makes me fucking sick.

 

[Generalpsyduck]

Spoiler

I love this .gif so much.

 

[sangreal]

That and some people might want to take higher risk options, but with the rule they won't know about the higher risk options.

I don't understand how brokers can't just disclose the higher risk, enabling better choices, but I'm not in finance.

they can, that isn't what the rule is about

this rule is about brokers shuttling people into the vehicles that pay the most commission (or other benefit to the broker)

they can even still do that, they just have to be open about it

http://www.investopedia.com/updates/dol-fiduciary-rule/

 

[SomewhatGroovy]

I had this talk with my friend the other night. It basically went like this.

You are the supposed experts. If you tell me that that I put my money in an investment that is 1% less safe then the one that would be best for me, because it is 20% better for the organization you work for, which in turn, would be very good for me as a customer, I would be inclined to believe you. Or at least.. it is a reasonable conversation we could have.

But I no longer trust your organization or any of the ones like it. You completely and utterly betrayed our trust and even AFTER, are still aggressively doing it (see Wells Fargo)

So NO. You don't get to have the regulations taken away. We need to be protected. You haven't done ONE THING to help us or to regain our trust.

Its so fucking arrogant. Or childish. Or both.

It makes me fucking sick.

None of this makes any sense. The DOL rule isnt going to stop a bank from opening checking accounts behind your back.

 

[Josh7289]

This is very good.

 

[Kenclops]

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