1
00:00:00,120 --> 00:00:03,000
Speaker 1: Now it's time for our daily Bloomberg Law Brief, exploring

2
00:00:03,080 --> 00:00:05,880
Speaker 1: legal issues in the news and Today, Bloomberg Lahos student

3
00:00:05,920 --> 00:00:09,560
Speaker 1: Grasso discusses the Labor Department's fiduciary rule that will go

4
00:00:09,600 --> 00:00:13,480
Speaker 1: into effect in April of seventeen. Despite adverse rulings by

5
00:00:13,480 --> 00:00:16,320
Speaker 1: two federal courts in Kansas and DC in favor of

6
00:00:16,360 --> 00:00:19,000
Speaker 1: the U S Department of Labor, there are many lawsuits

7
00:00:19,000 --> 00:00:21,639
Speaker 1: seeking to stop their Labor Department's rule, like spending the

8
00:00:21,640 --> 00:00:25,520
Speaker 1: fiducciary standard of care for retirement advisers. She spoke with

9
00:00:25,560 --> 00:00:29,560
Speaker 1: Elliott Stunn, a senior financials litigation analysts for Bloomberg Intelligence,

10
00:00:29,760 --> 00:00:32,840
Speaker 1: and Richard Painter, a professor at the University of Minnesota

11
00:00:32,920 --> 00:00:36,240
Speaker 1: Law School. Elliott tell us a little about the fiduciary

12
00:00:36,320 --> 00:00:39,199
Speaker 1: rule and the main arguments the plaintiffs are making in

13
00:00:39,240 --> 00:00:42,400
Speaker 1: these lawsuits. The rule is designed to reduce conflicts of

14
00:00:42,440 --> 00:00:46,560
Speaker 1: interest in the provisions of investment advice to retirement professionals.

15
00:00:46,800 --> 00:00:50,199
Speaker 1: Does that by expanding the types of finance professionals and

16
00:00:50,360 --> 00:00:54,320
Speaker 1: conduct that have to abide by the fiduciary standard of care. So,

17
00:00:54,360 --> 00:00:57,960
Speaker 1: whereas you know, fiduciaries used to cover registered investment advisors

18
00:00:57,960 --> 00:01:01,400
Speaker 1: primarily now under the final rule, it would sweep in

19
00:01:01,400 --> 00:01:04,959
Speaker 1: in addition to registered investment advisors, it would sweep in

20
00:01:05,360 --> 00:01:11,119
Speaker 1: broker dealers, insurers, insurance salespeople, and many more professionals who

21
00:01:11,200 --> 00:01:15,360
Speaker 1: are selling retirement related investment products. And Richard, on what

22
00:01:15,560 --> 00:01:20,280
Speaker 1: grounds are the plaintiffs in these cases challenging the rule. Well,

23
00:01:20,840 --> 00:01:23,960
Speaker 1: a lot of these claims are under the Administrative Procedures

24
00:01:24,000 --> 00:01:27,640
Speaker 1: Act that the appropriate procedures weren't followed. And also there's

25
00:01:27,680 --> 00:01:32,280
Speaker 1: some questions of statutory authorities, whether there's something that Department

26
00:01:32,280 --> 00:01:35,959
Speaker 1: of Labor ought to be getting into. The objections to this,

27
00:01:36,240 --> 00:01:39,880
Speaker 1: for the most part, though that I think are sound

28
00:01:40,040 --> 00:01:44,720
Speaker 1: or are not legal objections, but policy concerns with the

29
00:01:44,840 --> 00:01:47,960
Speaker 1: rule and the cost of implementing the rule that the

30
00:01:48,000 --> 00:01:51,760
Speaker 1: industry has and that I believe may be persuasive with

31
00:01:51,880 --> 00:01:56,560
Speaker 1: the incoming Trump administration. And so this is really abouttle

32
00:01:56,600 --> 00:02:00,120
Speaker 1: that ought to be conducted on the policy for on

33
00:02:00,680 --> 00:02:03,200
Speaker 1: rather than in the courts, where I think the courts

34
00:02:03,280 --> 00:02:07,160
Speaker 1: properly defer to the agency unless the agency is clearly

35
00:02:07,160 --> 00:02:11,200
Speaker 1: going beyond the statutory authority set forth by Congress. And

36
00:02:11,240 --> 00:02:14,600
Speaker 1: then the point of not so far made that case, Elliott,

37
00:02:15,200 --> 00:02:20,360
Speaker 1: what is the likelihood that the plaintiffs will succeed in

38
00:02:20,400 --> 00:02:23,200
Speaker 1: any of these lawsuits? They are too and oh so

39
00:02:23,280 --> 00:02:26,000
Speaker 1: far um so at the district court level, there's sort

40
00:02:26,000 --> 00:02:29,360
Speaker 1: of running out of courts to win over. They lost

41
00:02:29,360 --> 00:02:31,240
Speaker 1: the case in d C so far. In the case

42
00:02:31,280 --> 00:02:34,280
Speaker 1: in Kansas, they do have the ruling that they were waiting.

43
00:02:34,440 --> 00:02:37,880
Speaker 1: In the Northern District of Texas, the judge there held

44
00:02:37,960 --> 00:02:41,120
Speaker 1: oral arguments in November. She seemed to cite the DC

45
00:02:41,320 --> 00:02:44,679
Speaker 1: ruling favorably. She asked good questions and tough questions of

46
00:02:44,760 --> 00:02:48,160
Speaker 1: both sides, But she did also mention that the court

47
00:02:48,240 --> 00:02:51,280
Speaker 1: is not there to second guess the Labor Department, and

48
00:02:51,320 --> 00:02:54,000
Speaker 1: the agency just has to be justified in its conclusion,

49
00:02:54,160 --> 00:02:56,519
Speaker 1: which leads me to believe that she will also rule

50
00:02:56,560 --> 00:02:59,960
Speaker 1: for the Labor Department. That's Elliott Seine as senior Phinny

51
00:03:00,040 --> 00:03:03,920
Speaker 1: Chill's litigation analyst for Bloomberg Intelligence and Richard Painter, a

52
00:03:04,000 --> 00:03:07,040
Speaker 1: professor at the University of Minnesota Law School. They spoke

53
00:03:07,040 --> 00:03:09,359
Speaker 1: with Bloomberg la Ho stoom Grasso. You can listen to

54
00:03:09,400 --> 00:03:12,800
Speaker 1: Bloomberg Law weekdays at one pm Wall Street Time here

55
00:03:12,919 --> 00:03:15,840
Speaker 1: on Bloomberg Radio and that's this morning's Bloomberg Law Brief.

56
00:03:15,880 --> 00:03:18,120
Speaker 1: You can find more legal news at Bloomberg law dot

57
00:03:18,120 --> 00:03:21,399
Speaker 1: com and Bloomberg b NA dot com. Attorneys will find

58
00:03:21,400 --> 00:03:24,280
Speaker 1: exceptional legal research and business development tools there as well.

59
00:03:24,480 --> 00:03:27,440
Speaker 1: Visit Bloomberg law dot com and Bloomberg BNA dot com

60
00:03:27,560 --> 00:03:28,720
Speaker 1: for more information