The SEC’s acting chairman has attacked the Department of Labor’s fiduciary rule, calling it a “terrible” rule not designed to protect investors, the Wall Street Journal writes.

Speaking at an Investment Adviser Association conference, Michael Piwowar said the rule is “a terrible, horrible, no good, very bad rule” that would drive up profits for trial lawyers, according to the paper. He added that the rule, which requires retirement brokers to put clients’ interests first and was initially scheduled to go into effect in April, was “highly political,” the Journal writes.

His comments suggest the SEC isn’t likely to beef up regulations on brokers even if the DOL’s rule is repealed, according to the paper. The DOL has already proposed delaying the rule by 60 days and opening it up to another public comment period, following a memorandum from President Donald Trump directing it to review the rule.

But if the SEC were to roll out out its own fiduciary rule, Piwowar said the focus should be more narrow, the Journal writes. One option would be to forbid brokers from calling themselves “financial advisors” so as not to confuse investors, he said, since brokers are held to the less-stringent suitability standard, according to the paper.

Piwowar is also opposed to a proposal advanced by former chairwoman Mary Jo White to allow third-party exams of advisors, the Journal writes. Such a move would only require the SEC to spend more resources on oversight of the examiners themselves, he said, according to the paper.


At the same conference, Piwowar also said he has halted any further SEC action on the Dodd-Frank Act, Financial Advisor magazine writes. Doing so will allow the commission to focus on issues otherwise overlooked during the six years it’s been working through Dodd-Frank regulations, according to the publication. And in the long term, Piwowar said, the agency needs to understand which regional offices need extra staffing, based on which geographical areas have the most RIAs and client assets, he said, according to Financial Advisor magazine.

Trump’s pick to lead the agency, Jay Clayton, has yet to have his Senate confirmation hearing and there are still no nominations for the two other open seats on the five-member commission.

And the rule would expose retirement investors to significant losses in a market downturn — and leave advisors vulnerable to lawsuits, according to Anthony Scaramucci, ThinkAdvisor writes.

The hedge fund personality and associate of President Donald Trump said he “hates” the rule because it limits investment options, according to the publication.

Investors should have 5% to 15% of their portfolios in alternative products not correlated with the market overall, Scaramucci told RIAs at a Pershing Advisor Solutions summit, according to ThinkAdvisor. But advisors have been “herding people into low-cost ETFs or indexes,” he said, according to the publication. In volatile markets such as the current one, he said, when those investments sour, clients can sue advisors, according to ThinkAdvisor.

Scaramucci has been a vocal opponent of the rule since he was an advisor on Trump’s presidential campaign.

At one point he compared the rule to the infamous Dred Scott Decision — the 1857 U.S. Supreme Court ruling that said African-Americans weren’t American citizens. More recently Scaramucci grabbed headlines for a tweet that seemingly blamed Democrats for inciting violence against Jewish sites.

The DOL, meanwhile, has proposed a 60-day delay of the rule and a new public comment period, in response to a memorandum from Trump requesting another review.