Sens. Elizabeth Warren (D-MA), Cory Booker (D-NJ), and Sherrod Brown (D-OH) recently forwarded correspondence to the Financial Industry Regulatory Authority (FINRA) as means of gaining clarity regarding a Security and Exchange Commission (SEC) standards of conduct rule.
The senators sent a letter to the FINRA President and Chief Executive Officer Robert W. Cook requesting the organization provide its interpretation of the SEC’s proposed standards of conduct rule.
The lawmakers said they are concerned the rule, which FINRA will play a significant role in implementing and enforcing, would not adequately protect investors or guarantee brokers put their clients’ interests ahead of their own.
“Despite its title implying a much more stringent standard, this proposal is unlikely, for several reasons, to give investors the peace of mind they deserve that the advice they are receiving is truly in their best interests,” the senators wrote. “In other words, billions of dollars in middle-class Americans’ hard-earned savings-which families need to buy a house, send a child to college, or retire in old age may depend on how you understand and implement the SEC’s rule.”
The lawmakers said the correspondence was generated in the wake of a statement issued by Warren in April expressing concern the proposal would do little to eliminate conflicts of interest and protect working families from conflicted investment advice.