American Express Financial Advisors has filed suit in U.S. District Court in New Hampshire asserting that federal law preempts that state's securities regulators from pressing fraud charges against its brokers, The Wall Street Journal reports.
The
Such incentives, the state said in Feb. 18 announcement, is in violation of state and federal securities laws requiring advisers to act in their clients' best interest and to disclose any potential conflicts of interest.
David Kanihan, a spokesman for American Express, told WSJ, "The issues raised in this matter are covered by federal securities laws, and, therefore, we believe that a federal court is the appropriate jurisdiction" for the complaint. American Express further argues that the disclosure issue is a matter regulated by the
The state seeks $17.5 million in fines and restitution and another $200,000 in investigation costs.
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