Court Rules That Stockbrokers Must Register As Investment Advisers When Paid Asset-Based Fees And Not Commissions
Recently the U.S. Court of Appeals for the District of Columbia Circuit issued a decision that represents a landmark victory for registered investment advisers and a defeat for major brokerage firms (such as Merrill Lynch, Smith Barney, Wachovia Securities and Morgan Stanley). The Financial Planning Association (FPA) filed the lawsuit against the Securities and Exchange Commission (SEC) arguing that the SEC had exceeded its authority in creating an exemption from investment adviser registration under the Investment Advisers Act for stockbrokers who charge asset-based fees for their services. Let's examine three key questions relating to the court decision in FPA v. SEC striking down the so-called "Merrill Lynch Rule."
FinancialCounsel.com, hosted by James J. Eccleston, is the companion website to this blog. It contains complimentary material of general interest to investors and financial services professionals. Investors will find material on securities arbitration to recover investment losses; industry and financial markets intelligence; and strategies for estate planning. Professionals have access to material on broker/adviser registration, regulation, compliance and disciplinary proceedings; industry and financial markets intelligence; strategies for estate planning; and broker/adviser employment litigation and injunctions, including defamation and non-competition/solicitation issues. 
James J. Eccleston heads the securities group at Shaheen, Novoselsky, Staat, Filipowski & Eccleston, P.C., a business law firm dedicated to closely-held business owners, senior executives and high net worth individuals. With three core practice groups - securities, general litigation, and corporate / transactional - and many subspecialties, SNSFE provides clients a full spectrum of legal services, from start-up to succession planning. Visit snsfe-law.com or call 312.621.4400 for more information. 
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