The recent lawsuits filed against the Securities and Exchange Commission’s Regulation Best Interest by seven states are “more political posturings” than “credible, legal maneuvers” and are unlikely to succeed, according to ERISA attorney Brad Campbell of Drinker Biddle.
The recent lawsuits by the state attorneys general show they believe Reg BI “was not the right policy solution,” Campbell said on Drinker Biddle’s recent Inside the Beltway webcast. The lawsuit “fits in” with the actions by some states to pursue their own fiduciary regulations.
The lawsuits are “more indicative of a political split and a policy split between the federal government and the states,” said Campbell, the former head of Labor’s Employee Benefits Security Administration.
Jim Lundy, partner in Drinker Biddle’s Chicago office, added that he believes the SEC “will do everything to be successful” in fighting the lawsuits. “I do think the [legal] challenges [against Reg BI] will be unsuccessful.”
He reminded attendees that the legal challenges are only against Reg BI and not the other parts of the SEC’s advice-standards package, like Form CRS.