Welcome to Financial Advisor IQ

Departing NY AG Facing Abuse Allegations Had Made Name as Investor Champion

May 17, 2018

Eric Schneiderman, who resigned from his post as the New York state attorney general following grave accusations of physical abuse, had made a name for himself as an investor advocate scrutinizing Wall Street, according to WealthManagement.com.

Schneiderman is facing allegations of physical abuse against four women and has resigned his post, with State Solicitor General Barbara Underwood taking over as the acting attorney general for New York, the web publication writes.

In March, Schneiderman’s office fined Bank of America Merrill Lynch $42 million over electronic trading infractions, which was the largest fine to date related to electronic trading, according to the web publication. Schneiderman alleged that for five years the company routed trades to several firms without customer knowledge, WealthManagement.com writes.

More recently, Schneiderman, along with two other state attorneys general and the AARP, tried to rescue the Department of Labor’s fiduciary rule, the web publication writes. At the end of April, the attorneys general and the AARP filed last-minute motions to save the rule, the web publication writes. The Fifth Circuit Court of Appeals denied the motions to rescue the rule, which had gone into only partial effect last summer, as the court had vacated the rule in March.

Schneiderman had long been a proponent of the DOL’s fiduciary rule. Last spring, he sent a letter to the agency urging it not to delay the rule’s implementation, following a directive from President Donald Trump to review the rule, WealthManagement.com writes.

Before he took up the fiduciary rule mantle, Schneiderman was one of the people behind investigations into mortgage-backed securities sales, according to the web publication. The former state attorney general set his sights on large brokerages including JPMorgan Chase, Morgan Stanley, UBS, Bank of America, Citigroup and Goldman Sachs for their role in the sales, and helped return close to $4 billion in cash and consumer relief, WealthManagement.com writes.

By Alex Padalka
  • To read the Wealth Management article cited in this story, click here.