A federal judge has struck down a Missouri rule aimed at limiting the influence that environmental, social and governance (ESG) policies can have on investment advice.
U.S. District Judge Steven Baugh on Wednesday sided with the Securities Industry and Financial Markets Association. In order On all four counts, the lawsuit argues that the rules violate the First Amendment, are unconstitutionally vague and are preempted by multiple federal statutes.
The lawsuit was first filed last year by an industry group, which said in a statement Wednesday that it was a “major victory” for the country.
The rule, enacted last year by Missouri Secretary of State John Ashcroft, requires investment advisers considering ESG goals to disclose them to clients and get their consent. According to ReutersAccording to the order, the judge found that the rules conflict with federal securities and pension laws.
Kenneth Bentsen, president of the industry group, praised the decision. In a statement It was published on the website.
“This decision marks a major win not only for our securities market system but also for the nation,” he said.
“Current federal securities laws already require financial professionals to provide investment advice and recommendations in their clients’ best interests — that is, they cannot put their own interests ahead of their clients’ interests when recommending securities. Therefore, Missouri’s rule was unnecessary and confusing,” he continued.
This is just one example of the Republican-led opposition to ESG policies in recent years. Last year, Florida Governor Ron DeSantis (Republican) announced that he would join 18 other states, including Missouri, in opposing President Biden’s support for ESG investing.
Earlier this year, Ashcroft ran for the state legislature. Approve the law It promoted ESG policies similar to rules introduced last year.
“Missouris work hard for their money, and when they invest it, it makes sense to have standards that require financial advisors who promote strategies that are not profit-driven to fully disclose that to their clients. We want to make sure investors are aware of agendas they may not agree with and that could affect their bottom line,” he said in a March statement.
The Hill has reached out to Ashcroft’s office for comment.
