Last-ditch efforts by one large interest group and three state attorneys general have failed to rescue the Department of Labor’s (DOL) fiduciary rule, which was struck down by the 5th Circuit of Appeals in March in a 2-1 split decision by a three judge panel. The 5th Circuit decision overturned a Dallas federal judge’s earlier order upholding the rule, which would impose a fiduciary standard of care on broker-dealers and investment advisers that provide investment advice to retirement plan investors. The rule now appears doomed unless the U.S. Supreme Court steps in to save the embattled regulation. The 5th Circuit’s decision to vacate the rule goes into effect today.
On April 26, a coalition of the Attorneys General for California, New York, and Oregon filed a petition in the 5th Circuit to request the court’s permission to intervene in a lawsuit challenging the DOL regulation, along with a petition for rehearing en banc asking the full 17-judge court to rehear the matter. In a separate filing the same day, the AARP—the behemoth association representing older and retired persons—also moved to intervene in the suit, in a last-minute attempt to defend the DOL’s rule.
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