Article
Regulatory Arbitrage and the
Persistence of Financial Misconduct
by Colleen Honigsberg, Edwin Hu & Robert J. Jackson, Jr.
Financial-advisor misconduct often has devastating consequences, leading lawmakers to seek tightened investor protections at the federal level. But many advisors can choose whether to be regulated under the federal regime or instead be overseen by state insurance regulators, giving advisors with a history of misconduct reason to select the laxer state-level regulatory environment. Despite extensive…