Jay Ashcroft is sued over Missouri’s new ‘anti-woke’ investment rules | CPT PPP Coverage
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Jay Ashcroft is sued over Missouri’s new ‘anti-woke’ investment rules appeared on www.stltoday.com by STLtoday.com.
JEFFERSON CITY — A leading trade organization representing the financial industry sued Missouri Secretary of State Jay Ashcroft Thursday over new rules targeting so-called “woke” investing.
The Securities Industry and Financial Markets Association said the new rules, which went into effect July 30, conflict with federal securities laws, which were created to provide a uniform regulatory regime for investors across all 50 states.
“U.S. capital markets are the bedrock of our nation’s economy. The national nature of our securities market system helps ensure that the U.S. has the deepest, most liquid markets in the world,” said SIFMA President Kenneth E. Bentsen Jr.
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Ashcroft, a Republican who is running for governor in 2024, issued the rules — the first in the nation — after a similar “anti-woke” investing proposal died in the Legislature.
The measure won approval in the House, but went nowhere in the Senate amid opposition from a wide variety of groups, including the Missouri Chamber of Commerce.
The rules require broker-dealers to obtain consent from customers to purchase or sell an investment product based on social or other nonfinancial objectives, such as combating climate change.
It marked the second time Ashcroft has used an obscure rule-making process to highlight a Republican “culture war” issue as he tries to run to the right of Lt. Gov. Mike Kehoe and Sen. Bill Eigel, R-Weldon Spring.
Earlier, he pushed through a rule change affecting public libraries and pornographic material that was deeply opposed by librarians.
Ashcroft’s maneuver also followed another Republican statewide elected official in making investing a political issue.
Former Missouri Treasurer Scott Fitzpatrick, who is now state auditor, pulled $500 million out of pension funds managed by BlackRock Inc. in October, saying the asset manager was “prioritizing” environmental, social and governance over shareholder returns.
Missouri Attorney General Andrew Bailey, another Republican eyeing the 2024 election, also has weighed in by joining his colleagues in other states in warning asset managers against using climate goals in offering investment advice.
In the latest lawsuit, which was filed in U.S. District Court in Missouri’s western division, the trade organization said the new Missouri rules fill no void or blind spot that would protect Missouri investors today.
Under existing federal securities laws, broker-dealers and investment advisers are already required to provide investment advice that is in the best interest of their customers, the group said.
“The Missouri rules are thus unnecessary and create confusion,” the organization added.
The 43-page suit alleges that the rules violate the Constitutional right to free speech by requiring brokers to stick to a script outlined in the new rule.
“The government cannot compel professionals to make policy statements on political issues,” the lawsuit says.
An Ashcroft spokesman did not immediately respond to a request for comment.
When Ashcroft introduced the rules in January, his office said they were “intended to better protect investors from companies that engage in risky, misleading and sometimes unethical practices when investment models are utilized which are not purely profit based.”
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