(Bloomberg) -- A federal appeals court struck down an Obama-era rule requiring retirement account managers to put their clients' interests ahead of their own, handing a victory to the U.S. Chamber of Commerce and other business groups.
The U.S. Court of Appeals for the Fifth Circuit in New Orleans ruled 2-1 to vacate the fiduciary rule, noting that the Trump administration directed the Labor Department to re-examine the rule and prepare an updated analysis of its provisions, some of which don't become effective until July 2019.
Earlier this week, the fiduciary rule survived a similar challenge at the Denver-based U.S. Court of Appeals for the Tenth Circuit. That court said the rule was the result of a sound regulatory process.
The Fifth Circuit judges wrote that despite the administration announcing plans to rescind or amend the rule, the case “is not moot.” The rule “has already spawned significant market consequences, including the withdrawal of several major companies” from some segments of the brokerage and retirement investor market, according to the ruling Thursday.
The case is Chamber of Commerce of the United States of America v. U.S. Department of Labor, 17-10238, U.S. Court of Appeals for the Fifth Circuit (New Orleans).
To contact the reporter on this story: Tom Korosec in Dallas at tkorosec@bloomberg.net.
To contact the editors responsible for this story: Elizabeth Wollman at ewollman@bloomberg.net, Peter Blumberg
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