Scottrade has filed to remove to federal court the recent charge levied by the Massachusetts Securities Division claiming the broker-dealer violated the Labor Department’s fiduciary rule.
In a March 16 filing, Scottrade states that the securities division is attempting, through its administrative action, to enforce the requirements of the rule despite the fact that Labor has suspended enforcement until July 2019.
Scottrade also argues that the Employee Retirement Income Security Act “completely preempts such state enforcement actions.”
The Massachusetts Securities Division, headed by William Galvin, charged Scottrade with violating the impartial conduct standards laid out in the Labor Department’s fiduciary rule, which took effect on June 9, 2017.
Galvin charged the broker-dealer with “dishonest and unethical activity and failure to supervise” for conducting sales contests that violated Labor’s impartial conduct standards.
A spokesperson for Galvin’s office told ThinkAdvisor on Friday that his office is “challenging the removal and [is] seeking to have it remanded to the state.”