Securities Litigation

SEC Chair Mary Jo White said yesterday that the SEC needs to move forward on a uniform fiduciary standard for the financial industry, including brokers. Addressing the annual meeting of the Securities Industry and Financial Markets Association, White said it's high time to act since the agency has studied the issue for years, "decades really." And while she welcomes input from the Department of Labor, the SEC is the agency to adopt the rule, because it is the primary regulator with the greatest depth of knowledge about the industry - a sentiment echoed Monday by FINRA Chairman Rick Ketchum. White said the three pillars of any fiduciary rule should be: (1) Defining the standard of conduct; (2) Providing guidance on precisely what behaviors are required to meet that standard; and (3) How to ensure compliance and enforcement. White expects a codified, principles-based rule no less stringent than the current rule governing investment advisers. She said the agency should be sensitive to avoid a standard that prevents the provision of lower-priced, yet responsible, advice. Looking back on her tenure as the SEC's Chair, White named among the agency's accomplishments extensive rulemaking "to address what happened in the financial crisis" and "appropriately aggressive" enforcement. She thinks the SEC is "firing on all cylinders" today. Of the SEC's 2015 priorites, White pointed to cyber-security. With initiatives underway across many regulatory agencies and the private sector, she said perhaps the "biggest risk within the risk" is that "responsibility will get too dispersed," so "coordination is key." Thomas K. Potter, III (tpotter@burr.com) is a partner in the Securities Litigation Practice Group at Burr & Forman, LLP. Managing Partner of the Nashville office, Tom is licensed in Tennessee, Texas and Louisiana. He has over 28 years' experience representing financial institutions in litigation, regulatory and compliance matters. © 2015 by Thomas K. Potter, III (all rights reserved)