Last week I posted that eight States had sued the SEC over the allegedly weak content of the SEC Regulation BI that set fiduciary standards for registered investment advisers and something a bit less robust (and more confusing perhaps) for registered broker dealers.

It seems that a couple of registered investment advisers also have sued the SEC on September 10, making similar complaint that the SEC lacked authority to issue BI and its related confusing interpretive release. The suit notes that the SEC in so acting had ignored the recommendations of the SEC staff.

An observation: I don’t think BI is confusing, and I think it is made more user-friendly by the release. The real point here is not that people are confused; the real point is that many people do not like the regulatory bottom line.

The twists and turns of these suits are beyond the scope of mere blog posts, but the point generally is that lots of people are unhappy with BI, complaining that brokers are getting a skate. As of now BI stands and becomes effective for brokers the first of next year, and its implementation has not (yet) been enjoined. I bet all brokerages are gearing up for BI compliance, including extensive disclosure requirements; who can take the risk of being in SEC violation?

I am getting tired of saying, as to this subject, “stay tuned.”