The U.S. Department of Labor scored a second victory in its efforts to defend its so-called fiduciary rule against a myriad of challenges when a Kansas federal judge on Monday denied an insurance agency’s bid to halt the rule. U.S. District Judge Daniel D. Crabtree denied the Market Synergy Group Inc.’s motion for a preliminary injunction halting a portion of the new fiduciary rule, saying the DOL adequately analyzed the effect of stiffening rules around sales of fixed indexed annuities before including them in new regulations.
Judge Daniel Crabtree, an Obama appointee, issued a 63-page decision Monday rejecting plaintiff Market Synergy Group’s request for a preliminary injunction stopping the rule. The judge ruled the MSG did not meet the four-part standard needed for prevail in an injunction proceeding.
“Any injunction thus will produce a public harm that outweighs any harm that plaintiff may sustain from the rule change,” Crabtree wrote in his ruling. “Congress authorized the DOL to evaluate these competing interests and it has concluded that significant public interests favor the proposed regulatory changes. As already explained, evidence in the administrative record supports the DOL’s determination and the court finds no basis for contradicting those findings.”
This was the second challenge to the proposed rule that the financial services industry strongly opposes. Expect more challenges to come though it seems paradoxical the industry would be so opposed to a rule that requires their representatives to act in the best interest of their clients.
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