Wall Street Brokers Face More SEC Scrutiny Over Conduct Rules

Wall Street’s main watchdog is ratcheting up its scrutiny of whether brokers and financial advisers are complying with the agency’s code of conduct for avoiding conflicts of interest.

US Securities and Exchange Commission staff -- including enforcement lawyers -- are reviewing whether investment professionals are putting their retail clients’ interests ahead of their own and properly considering customers’ costs and risks, Chair Gary Gensler said at an event in Washington on Tuesday. Additional guidance from the agency about conduct rules is likely, he said.

“Brokers and advisers need to prevent their own interests from inappropriately influencing their recommendations and advice,” ...