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April 17, 2018 at 04:04 PM
Scottrade in Atlanta. (Photo: John Disney/ALM)
The Massachusetts Securities Division is fighting back against Scottrade’s move to have the recent charge levied against the broker-dealer for violating the Labor Department’s fiduciary rule removed to a federal court.
Attorneys representing the Enforcement Section of the Massachusetts Securities Division, which claimed Scottrade violated the fiduciary rule, said in an April 13 filing that Scottrade’s attempts fail to satisfy terms of the removal statute in two separate respects.
First, the attorneys state, action by a state agency to enforce the Massachusetts Securities Act is not one “of which the district courts of the United States would have original jurisdiction … as even Scottrade itself does not contend that the Enforcement Section could have filed its action in this Court.”
Moreover, the securities division’s action against Scottrade “was also not initially ‘brought in a State court,’ … but instead was filed within a State administrative agency,” the filing states.
In a March 16 filing, Scottrade states that the securities division was attempting, through its administrative action, to enforce the fiduciary rule despite the fact that Labor has suspended enforcement until July 2019.
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.
