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Galvin Slams SEC's Piwowar Over Anti-Fiduciary Rule Comments

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Massachusetts’ top securities regulator, Commonwealth Secretary William Galvin, is slamming SEC Commissioner Michael Piwowar’s recent comments opposing the Department of Labor’s fiduciary rule and is urging Labor to “continue to staunchly defend” the rule.

In this Friday letter to Labor, Galvin stated that “the horrific financial abuses associated with conflicted advice in the area of retirement rollovers have been well documented. I am therefore dismayed that a sitting SEC commissioner would so forcefully join with industry to attack the rule.”

Piwowar, a Republican, told Labor in a Tuesday comment letter that the fiduciary rule is troubling because it will “extend beyond retirement accounts and will be disruptive of the broker-client relationship in general.”

Labor’s fiduciary rule “will have a dramatic impact on the provision of financial services to retail clients throughout the financial services industry,” Piwowar said in his response to Labor’s request for information.

Galvin stated in his letter to Labor that “business groups looking to capitalize on Piwowar’s comments are already using them to their advantage,” stating that on Thursday, Piwowar’s letter “was used in court before the Fifth Circuit in litigation aimed at striking down the rule.”

The Fifth Circuit Court of Appeals in Texas will hear oral arguments Monday morning in the case brought against Labor’s fiduciary rule by nine plaintiffs, including the Securities Industry and Financial Markets Association, the U.S. Chamber of Commerce and the Financial Services Institute.

Gibson Dunn Partner Eugene Scalia, who’s representing the plaintiffs in their battle against Labor’s fiduciary rule, argued in the Thursday letter to the court that Piwowar’s “comment letter supports Appellants’ arguments that DOL has overstepped its authority, and unreasonably and unconstitutionally fashioned a new regulatory framework that clashes with decades of legislation and securities regulations.”

Galvin urged the SEC to join with Labor and state securities regulators in “working toward a high uniform fiduciary standard that would apply across the professional categories of broker-dealers, investment advisors, and other sellers of financial products.”

— Check out ‘Greater Clarity’ Needed on SEC, DOL Fiduciary Rules: Clayton on ThinkAdvisor.