June 05, 2019

Statement from Senator Warren on Final SEC Standards of Conduct Rules

Washington, DC - United States Senator Elizabeth Warren (D-Mass.) today issued the following statement on the U.S. Securities and Exchange Commission's (SEC) final standards of conduct rules for investment professionals:

"The SEC's new rules make it easier for Wall Street to cheat families out of their hard-earned life savings," said Senator Warren. "The rules fail to ban conflicts of interest, leave open gaping loopholes, and, despite their deceptive name, don't require financial professionals to put investors' interests ahead of their own. American workers are facing a retirement crisis -- the SEC should be strengthening protections for investors, not giving the green light for investment professions to trick them into buying harmful, costly products."

Senator Warren spoke out against the SEC's rules when they were first proposed in April 2018, and published an op-ed explaining how the rules would fail to protect investors. Senator Warren has long supported strong protections against conflicts of interest in investment advice, including the Department of Labor's 2016 Conflict-of-Interest Rule. She has drawn attention to the dangers that bad advice poses to investors through reports on kickbacks in the annuity industry and exposed lobbyists' misleading claims about the impact of those protections on the industry. 

Despite explicit authority granted by Congress, the SEC declined to require broker-dealers and investment advisers to put their clients' interests ahead of their own. The agency's long, complicated, and ambiguous rulemaking package, based on economic analysis that "does not fully consider" relevant factors,  is unlikely to give investors the peace of mind they deserve that the advice they are receiving is truly in their best interests.

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