What You Have to Know
- Galvin mentioned he is happy and gratified that the court docket has dominated that the state’s Fiduciary Rule is an applicable train of his authority.
- The state’s case towards Robinhood for utilizing overly aggressive techniques to draw new, usually inexperienced, traders may transfer ahead.
- The court docket additionally dominated that the state’s fiduciary responsibility rule doesn’t override the common-law protections accessible to traders.
The Massachusetts Supreme Judicial Court docket dominated Friday to uphold the Massachusetts fiduciary rule and permit Secretary of State William Galvin’s administrative case towards Robinhood to maneuver ahead.
In April, Galvin, Massachusetts’ prime securities regulator, appealed a Superior Court docket decide’s resolution issued final March that struck down the state’s fiduciary rule.
In its ruling, issued Friday, the Massachusetts Supreme Judicial Court docket said that the case “considerations the query whether or not, by promulgating the fiduciary responsibility rule, the Secretary overstepped the bounds of the authority granted to him underneath [Massachusetts Uniform Securities Act] MUSA. We conclude that he didn’t.”
The court docket added that the state’s fiduciary responsibility “rule doesn’t override the common-law protections accessible to traders, that MUSA isn’t an impermissible delegation of legislative energy, and that the rule isn’t preempted by the Securities and Trade Fee’s (SEC) dedication to impose a nationwide ‘finest curiosity’ normal of care on broker-dealers.”
Galvin mentioned Friday in a press release that he’s ”happy and gratified that the Court docket has dominated that our Fiduciary Rule is an applicable train of my authority underneath the Massachusetts Uniform Securities Act.
“This landmark resolution affirms the fiduciary responsibility of brokers to their prospects and vindicates the position of my Securities Division to principally, however aggressively defend traders and police broker-dealer misconduct,” he defined.
