Sen. Elizabeth Warren, D-Mass., is calling on the Securities and Exchange Commission to investigate several critics of the Department of Labor’s fiduciary rule, claiming they misled investors through duplicitous statements.
In a letter today to SEC Chairwoman Mary Jo White, Warren noted that the companies -- Lincoln National, Jackson National, Prudential and Transamerica – claim the proposed rule is “unworkable” and will have a dire impact on their businesses.
Meanwhile, in conference calls with investors, executives for the four companies all waved off the rule’s effect on their ability to grow profits, Warren said.
“When companies make these kinds of conflicting statements, it is left to investors to unravel which statement is true and which statement is false and to determine what this means for the true value of the company and its stock,” the senator wrote. “This is exactly the scenario that our securities laws are designed to prevent and precisely why compliance with these laws is so important.”
The DOL rule is expected to be published any day now, and will uphold a fiduciary standard to advice provided to qualified retirement plans employer plans and individual retirement accounts (IRAs). The DOL has said commission-based advice creates conflicts of interest that cost consumers.
Representatives for the companies released statements defending their comments on the rule.
“We have consistently supported the DOL’s objective of making sure consumers receive financial advice that is in their best interests. In our comments to the DOL, we have requested modest changes to the proposed rule which would better allow consumers to have continued access to retirement products that offer guaranteed lifetime income,” said Eric Samansky, spokesman for Lincoln Financial Group.
“In our comments to investors, we have explained how we could respond to the rule in the event of a sales disruption as a result of consumers’ more limited access to these products. These comments, which address different issues, are in no way contradictory and we stand by them,” Samansky added.
Transamerica and Prudential re-released earlier statements made when Warren first made her accusations. Jackson did not respond to requests for comment.
A frequent critic of the financial services industry, Warren noted that the SEC has pursued cases against CVS Caremark Corp. and Citigroup over alleged misleading information provided on investor calls.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at firstname.lastname@example.org.
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