KEY POINTS
  • The states say the SEC is putting investors in jeopardy by relaxing rules for brokers
  • The lawsuit asks a judge to order the agency to scrap new rules that weaken protections for consumers
  • The states say bad investment advice leaves consumers with less money to spend, thus hampering tax collection efforts
The U.S. Securities and Exchange Commission in Washington, D.C.

Seven states and the District of Columbia have sued the Securities and Exchange Commission, saying the regulatory agency is putting investors in jeopardy by relaxing rules for brokers.

The lawsuit filed Monday in Manhattan federal court asks a judge to order the agency to scrap new rules that weaken protections for consumers.