U.S. states challenge Biden rule on socially conscious investing
Reuters
Published Jan 27, 2023 10:09AM ET
Updated Jan 27, 2023 01:51PM ET
By Daniel Wiessner
(Reuters) - A coalition of 25 U.S. states led by Texas and Utah filed a lawsuit seeking to strike down a Biden administration rule allowing retirement plans to consider environmental, social and governance (ESG) factors such as climate change and racial justice when selecting investments.
The states filed a complaint in a federal court in Amarillo, Texas, on Thursday arguing that the rule finalized in November will lead many retirement plans to focus on a social agenda rather than long-term financial stability for investors.
The rule, which takes effect on Monday, reverses restrictions on socially conscious investing that were adopted by the Trump administration.
The states in Thursday's lawsuit said the new rule fails to justify the departure from Trump-era regulations, in violation of the federal law governing rulemaking.
And, the states said, it violates the U.S. law that regulates employee benefit plans by failing to protect retirement assets.
The U.S. Department of Labor, which adopted the rule, and the White House did not immediately respond to requests for comment on Friday.
Texas Attorney General Ken Paxton, a Republican, in a statement called the rule "insulting and illegal."
"For generations, federal law has required that fiduciaries place their clients’ financial interests at the forefront, and I intend to fight the Biden Administration in court to ensure that they cannot put hard-working Americans’ retirement savings at risk," Paxton said.
The lawsuit was assigned to U.S. District Judge Matthew Kacsmaryk, a Trump appointee who has struck down Biden administration rules on immigration and healthcare protections for LGBT people.
The case is Utah v. Walsh, U.S. District Court for the Northern District of Texas, No. 2:23-cv-00016.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.