WASHINGTON?Opposing a contentious new rule on retirement advice, executives from several insurance companies complained that it created significant headwinds to their business. But when apprising investors of the potential impact, the same companies said they were well positioned to weather the new regulation.
These conflicting statements, said Sen. Elizabeth Warren (D., Mass.), weren't just confusing, but they may have violated securities laws.
On Thursday, Ms. Warren was set to request that the Securities and Exchange Commission investigate the discrepancies, saying that several securities laws prohibit companies from misleading investors about facts that could affect their business and stock price.
"Both sets of industry claims?cannot possibly be true. And if one of these public statements is materially false, it would appear to violate long-standing interpretations of our securities laws," she said in a letter addressed to SEC chief Mary Jo White.
Ms. Warren is circulating the letter as the Labor Department gears up to unveil the final draft of the rule, which imposes a tougher "fiduciary" standard on brokers and financial advisers working on retirement accounts like individual retirement accounts and 401(k)s. Under the rule, advisers would have to put their clients' interest above their own financial gain, a stricter standard than the current one.
For over five years, the financial industry has fiercely opposed the rule, saying that it would imperil a business model based on commission and revenue sharing. The rule is expected to be rolled out as early as next week.
In the letter, Ms. Warren cited examples of conflicting remarks made by executives of four insurance companies: Lincoln National Life Insurance Co., Jackson National Life Insurance Co., Transamerica Corp. and Prudential Financial Inc.
Lincoln National executive Dennis Glass said in his comment letter to the Labor Department in July 2015 that the proposed rule was "immensely burdensome" and "extremely intrusive." Two months earlier, Mr. Glass had told investors that he didn't see the rule as a "significant hurdle for continuing to grow that business," according to Ms. Warren.
A representative for Lincoln National didn't immediately respond to a request for comment.
Prudential's executive vice president and general counsel wrote in a comment letter that some of the rule's provisions posed a "significant challenge" that "will significantly increase" expenses. Around the same time, another Prudential executive told investors the company could still provide "offerings available on terms that work for everybody."
Scot Hoffman, a spokesman for Prudential, said his company's business mix and strategies enable it to navigate the potential disruption better than most of its rivals. "But that does not lessen our concerns about unintended consequences for American households," he said.
Representatives for Jackson National and Transamerica didn't immediately respond to requests for comment.
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