Spence v. American Airlines: Expanding the Playing Field for Fiduciary Liability?
Patterns of How the Financial Industry Tolerates Misconduct
A recent paper, The Market for Financial Adviser Misconduct (Journal of Political Economy, Publication Forthcoming), raises some important – and troubling – issues about how the financial industry treats advisers who engage in serious misconduct. The paper shows a number of different ways that adviser misconduct is concentrated – among repeat offenders, certain financial firms […]
Risk Pooling, Risk Shifting and Risky (Health Insurance) Business
The efforts to dismantle the Affordable Care Act, piece by piece, continue. Over the past few months the Trump Administration: • Finalized regulations expanding Association Health Plans (“AHPs”) for unrelated employers; • Signed the Tax Cuts and Jobs Act of 2017, eliminating the individual mandate; • Finalized regulations expanding short-term limited duration (“STLD”) coverage; • Stopped payments to insurance […]
Dancing on the Head of a Pin
The battle over the appropriate standard of conduct for financial advisers rages on. One of the most important distinctions in this battle is the difference between the responsibilities of an investment adviser and a broker. And yet, the current focus on the differences between advisers and brokers is missing a huge gap – consumers do not understand the niceties of this broker vs adviser difference and the confusion created by these rules is costing consumers billions of dollars per year.
Et Tu, Wells Fargo?
A recent article in the Wall Street Journal reported that Wells Fargo bank was under investigation for practices in the bank’s retirement division. According to the article the investigation focuses on practices intended to move clients into more expensive individual retirement accounts when they retire or leave their jobs. The article also noted that the […]
The SEC Enters the Fiduciary Fray
Our last blog (Nature Abhors a Vacuum – and So Should Fiduciaries) discussed the decision by the U.S. Court of Appeals for the Fifth Circuit to invalidate rules, issued by the U.S. Department of Labor, for financial professionals who sell financial services and products to retirement plan participants. One part of the Court’s rationale was […]
Nature Abhors a Vacuum - and So Should Fiduciaries
The recent decision by the U.S. Court of Appeals for the 5th Circuit to invalidate the DOL’s fiduciary rules creates further confusion in an area that had already suffered from an excess of …confusion. A few things to note in considering this state of affairs: • The 5th Circuit’s opinion goes to the core of key […]
Court of Appeals Strikes Down Fiduciary Rule
On March 15 the U.S. Court of Appeals for the Fifth Circuit struck down the DOL’s new fiduciary rule. This adds yet more uncertainty and confusion to a regulatory, legal and political tale that already has more than its share of … uncertainty and confusion. This blog post tries to make some sense of what […]
The New Federalism: Employee Benefits in the Laboratory
The past year has seen a number of articles describing new state laws covering a range of benefits-related areas. Examples include New York State’s new paid leave act and Nevada’s law regulating fiduciary behavior. And more such laws are around the corner – a recent Kaiser Health News article noted that at least nine states […]
Fiduciary Lawsuits: A New Chapter Opening?
A new chapter may be opening in the ongoing saga of litigation against plan fiduciaries. This new chapter could lead plan sponsors and advisors to rethink – and expand – their view of the scope of their fiduciary responsibility. On January 10, the plaintiffs in the lawsuit against New York University’s plans filed an amended […]