Massachusetts' Galvin: investors aren't 'pawns in a prize contest'

Author: John Crabb | Published: 27 Feb 2018

The Secretary of the Commonwealth of Massachusetts, William Galvin, has filed a complaint against Arizona-based discount brokerage Scottrade, citing a violation against the Department of Labor’s (DoL) fiduciary standard rule.

Scottrade, the complaint alleges, knowingly violated its own internal policies that were put in place to ensure compliance with the rule by instigating a number of internal contests based on the sale of retirement accounts.

Scottrade offered a series of sales contests to incentivise brokers to sell retirement accountsThe move comes amidst a period of uncertainty regarding the rule, the enforcement of large parts of which have been delayed until July 2019. The Securities and Exchange Commission (SEC) has also made it clear that it is exploring its own version of the rule that could supersede that of the DoL.
State v DoL
While the complaint heavily referenced the fiduciary rule itself, the regulator filed its complaint based on...