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Massachusetts Secretary of State William Galvin

Regulation and Compliance > Litigation

Massachusetts Fiduciary Rule Struck Down in Robinhood Case

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What You Need to Know

  • Ronbinhood filed a lawsuit in April 2021 to overturn the state's fiduciary rule.
  • The judge ruled the rule is invalid.
  • Galvin's office is considering an appeal.

In a win for Robinhood, a Superior Court Judge in Massachusetts struck down late Wednesday the state’s fiduciary rule.

Robinhood filed a lawsuit last April to overturn Massachusetts’ fiduciary rule, arguing Secretary of State William Galvin, Massachusetts’ top securities regulator, exceeded his authority in promulgating the state’s fiduciary rule.

Judge Michael Riccuiti agreed in his Wednesday ruling.

The court stated, however, that “considering the significant public policy concerns at issue in this case,” the order is stayed for 30 days so that Galvin can pursue an appeal of the decision.

A spokesperson for Galvin’s office told ThinkAdvisor Thursday in an email that they’re “still reviewing the decision, which came in late yesterday, and considering our options for a possible appeal.”

Dan Gallagher, Robinhood’s chief legal and corporate affairs officer, said in a statement that Robinhood is “pleased the Court has recognized that the Secretary’s Fiduciary Duty Rule is not valid. The Massachusetts Securities Division has consistently mischaracterized and disparaged Robinhood’s platform and customers without any legal basis. As the Court made clear, the Secretary’s decision to act unilaterally and reject any effort at coordinating with federal and state authorities supports the conclusion that by adopting the Fiduciary Duty Rule, the Secretary acted beyond his delegated authority.’”