A Missouri judge has struck down an investment regulation aimed at curbing what was described as “woke politics” in financial decisions. U.S. District Judge Stephen R. Bough ruled against the regulation, implemented by Republican Secretary of State Jay Ashcroft, which required investment professionals to obtain written consent from clients before considering nonfinancial objectives, such as environmental, social, and governance (ESG) factors, in investment decisions.
The judge found that the regulation violated the First Amendment rights of investment advisers and was preempted by federal laws governing investment brokers. The Missouri Chamber of Commerce and Industry supported the ruling, stating that the regulation would have placed an undue burden on investment firms.
Ashcroft, who announced his candidacy for Missouri governor in 2023, has vowed to appeal the decision, arguing that it endangers Missouri investors. The Securities Industry and Financial Markets Association (SIFMA), which challenged the rule, welcomed the ruling, emphasizing that federal laws already require financial professionals to act in their clients’ best interests.
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