CK Insights

New Jersey Bureau of Securities Invites Broker-Dealers’ Input on Potential Fiduciary Rule

New Jersey Bureau of Securities Invites Broker-Dealers’ Input on Potential Fiduciary Rule

September 25, 2018

NEWARK, NJ — New Jersey Governor Phil Murphy has announced that the New Jersey Bureau of Securities will promulgate a “fiduciary rule” applicable to all broker-dealers and investment professionals registered in New Jersey.  In light of the State of New Jersey’s press release, as presently contemplate, New Jersey’s fiduciary rule will substantially elevate broker-dealers’ standard of care to investors.

As the first step in the rule-making process, Christopher W. Gerold, Chief of the New Jersey Bureau of Securities, will soon issue a “Notice of Pre-Proposal” inviting broker-dealers and investment professionals to provide their “input” on such a fiduciary rule.  This Pre-Proposal period offers broker-dealers the opportunity to present their views, including insights concerning the potential negative consequences of the fiduciary rule, prior to Bureau Chief Gerold’s issuance of the draft rule.  The press release emphasized that this rulemaking “action by our Bureau of Securities [is intended to] make the state’s financial markets stronger and safer for New Jersey families.”  Broker-dealers are in the best position to assist the New Jersey Bureau of Securities in understanding whether and how the fiduciary rule can make “markets stronger and safer.”  Thus, their participation in the rule-making process is vital.

Calcagni & Kanefsky, LLP is a Newark-based boutique law firm of former federal and state prosecutors with decades of experience representing government entities and individuals in litigation as well as investigations, criminal prosecutions, and regulatory proceedings.  Notably, CK’s founders — Thomas R. Calcagni and Eric T. Kanefsky — each served as Directors of the New Jersey Division of Consumer Affairs, which oversees the Bureau of Securities.  The CK team also includes Samuel Scott Cornish, who in his capacity as the former Chief of the New Jersey Attorney General’s Office, Securities Fraud Prosecution Section, served as the primary legal counsel to the Bureau of Securities.  CK’s familiarity with the Division of Consumer Affairs’ and Bureau of Securities’ rulemaking process makes it uniquely qualified to assist New Jersey broker-dealers and investment professionals in navigating the rulemaking process and submitting input on their behalf.