SEC Broker Rule Opponents’ Challenge Tossed From District Court

A group of states and investment advisers suing the SEC over the agency’s new broker conflicts rule can’t pursue their case in district court, a New York federal judge said.

An appellate court is the proper forum for groups concerned about the Securities and Exchange Commission’s new Regulation Best Interest to challenge the rule, the U.S. District Court for the Southern District of New York said in a dismissal order docketed Sept. 27.

Regulation Best Interest, also known as Reg BI, requires brokers to act in the best interests of the client at the time they recommend a securities transaction, ...