Which Laws Apply to Broker-Dealers? Federal Laws? State Laws? Both? General Principles Leading to an Answer

TAMAR FRANKEL

BU Law emerita professor Tamar Frankel explains the law of preemption as it pertains to broker-dealers and their investor clients. She predicts, among other things, that either the clients will demand that broker-dealers adhere to a fiduciary duty, or else that states will impose that duty on them.

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In re Partington

Docket: SCWC-18-0000301

Opinion Date: March 5, 2020

Judge: Sabrina S. McKenna

Areas of Law: Legal Ethics

The Supreme Court held that the intermediate court of appeals (ICA) did not abuse its discretion by imposing sanctions on two attorneys (together, Counsel) and denying Counsel's motion to reconsider the sanctions orders but that the Office of Disciplinary Counsel (ODC) was not authorized to treat the sanctions orders as administrative dispositions that might be used in any future disciplinary proceedings as evidence of aggravation. In a criminal matter, the ICA sanctioned counsel each in the amount of $50 based on Haw. R. App. P. 51. Counsel filed a motion for reconsideration of the sanctions order, which the ICA denied. The Supreme Court affirmed the ICA's sanctions orders against Counsel but ordered that the clerk of court transmit this opinion to the ODC for appropriate action consistent with this opinion, holding (1) the ICA did not abuse its discretion by imposing sanctions pursuant to Rule 51 and denying the motion for reconsideration; and (2) the ODC was without authority to treat the sanctions orders as administrative dispositions that might be used in the future as evidence of a pattern of conduct in aggravation.