Wall Street Splits With Smaller Firms Over Broker-Rule Lawsuit
- Big banks favored compliance over fighting Labor Department
- Wells Fargo, Morgan Stanley said to have opposed court battle
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Some of the biggest Wall Street banks opposed an industry decision to sue the U.S. Labor Department over its new broker rules, exposing a fissure between the companies and their smaller competitors, people familiar with the matter said.
Debate over the high-profile litigation has roiled the Securities Industry and Financial Markets Association, one of several trade groups that sought to overturn the regulation in federal court in Dallas earlier this month. In a sign of the discontent, the association’s board held a vote on whether to join the case, a rare occurrence because it usually operates by consensus on such matters, the people said.