March 31, 2016

Senator Warren Calls for SEC Investigation Into Financial Services Providers Over Contradictory Statements on the DOL Conflict of Interest Rule

Questions Whether Companies May Have Violated Securities Laws That Prohibit Companies from Misleading Investors

Full text of Senator Warren's letter to the SEC available here (PDF)

Washington, DC - United States Senator Elizabeth Warren today sent a letter to Securities and Exchange Commission (SEC) Chair Mary Jo White to request that the SEC open an investigation into whether financial services providers violated securities laws by misleading investors by making contradictory statements about the impacts on their business practices of the Department of Labor's (DOL) pending Conflict of Interest Rule.

"Corporate interests have become accustomed to saying whatever they want about Washington policy debates, with little accountability when their predictions prove to be inaccurate," wrote Senator Warren. "But the information we have obtained raises questions about how, in this specific case, the companies could have knowingly provided such dramatically different public statements about the impact of the DOL Conflict of Interest Rule - in one example, saying almost simultaneously that the rule would be 'unworkable' and that the rule would not be 'a significant hurdle' - without misleading investors."

Last month, Senator Warren and Representative Elijah E. Cummings (D-Md.), Ranking Member of the House Committee on Oversight and Government Reform, sent a letter detailing the industry's contradictory statements to Secretary of Labor Thomas Perez and Office of Management and Budget Director Shaun Donovan to help inform their work on the Conflict of Interest Rule.

"The conflicting statements by corporate officials raise significant questions about whether they or their companies may have violated the securities laws. As these companies acknowledge in their own public statements, the outcome of the DOL Conflict of lnterest Rule - which will govern how they sell and invest trillions of dollars of retirement funds - is a material concern," wrote Senator Warren.

Read a PDF copy of the letter here.