State agencies are pushing the envelope with respect to their regulatory enforcement authority. Venable’s Randy Seybold and Andrew Kay explore how the resulting increase in improper “regulation through enforcement” actions presents a serious challenge for companies.
In recent years, changes in the economic and political landscapes have created an environment ripe for increased scrutiny and oversight by state regulators of the activities of financial services firms, investment advisors and life insurers. Namely, the 2008 financial crisis and subsequent recession on the economic front and the Trump administration’s deregulatory emphasis on the political front have caused some state regulators to significantly increase their regulatory enforcement and compliance activity toward such companies.
For example, after a change in the presidential administration and legal challenges constrained the Fiduciary Rule previously adopted by the United States Department of Labor, several states, including Connecticut, Maryland, New Jersey, New York and Nevada, have been pursuing state-level fiduciary requirements for investment advisors.[1] Although the SEC is working with such states to “craft a new framework that will eliminate any conflicts with state-level fiduciary rules,” the trend continues toward states…
