(New York)

Regulation Best Interest could be on the verge of being struck down in court just like the DOL’s Fiduciary Rule. A consortium of state attorney generals and fiduciary advisers has brought a consolidated lawsuit aiming to stop the rule. The case was rapidly dismissed by the Southern District of New York because of a lack of subject matter experience and it will now be heard by the 2nd Circuit Court. The plaintiffs are arguing that in its current form the rule does not meet the clear demands laid out in the Dodd-Frank Act.

FINSUM: The smart money is on the SEC prevailing, but we expect this will just be an opening salvo in a long legal battle over the rule.