A disturbing article from the Wall Street Journal says that a significant number of comments posted about a federal rule aimed at protecting retirement investments were fake.
The Labor Department is taking comments on a proposal held over from the Obama administration — a so-called fiduciary rule that would require investment advisers to act in the best interest of clients and avoid conflicts of interest. An analysis found that many of the comments weren’t made by people to whom they were attributed — 40 percent in the sample drawn.
Consider the experience of Robert Schubert, a Devon, Pa., salesperson. A comment posted in his name on the Labor Department website opposed the rule, saying: “I do not need, do not want and object to any federal interference in my retirement planning.”
In an interview, Mr. Schubert said the comment was a fraud. He didn’t post it and doesn’t agree with it. “I am disgusted that people can post comments using my name,” Mr. Schubert said.
Given the Trump administration propensity for reversing all things Obama and general opposition to government regulation (not to mention Trumpian conflicts of interest in business and government), it seems like a good bet this proposal is in for some tough sledding. But the fiduciary rule is only a small part of a bigger story.
On federal government web sites, public comments can influence the outcome of regulations affecting millions of people. A WSJ investigation has identified and analyzed thousands of fraudulent posts on issues such as FCC net neutrality rules and payday lending.
The Labor Department is the fifth agency identified by The Journal to have posted unauthorized comments on its website. Most federal agencies make it difficult to independently check the authenticity of public comments; only a few publish email addresses along with the comments.
The Journal previously found fraudulent postings under names and email addresses at the Consumer Financial Protection Bureau, Federal Energy Regulatory Commission and Securities and Exchange Commission and the Federal Communications Commission. The Journal’s findings were cited by calls from Congress to delay the repeal of the FCC’s net-neutrality rule.
The fiduciary rule has been fiercely opposed by brokerage firms, insurance companies and mutual fund providers that worry it will make it difficult to sell lucrative financial products that come with high fees. They also are concerned it will add costs through new disclosure requirements and procedures, which in turn will discourage some companies and financial advisers from serving investors with small nest eggs.The Trump administration’s Labor Department is delaying implementation of most of the rule from Jan. 1 to July 1, 2019 while it reviews the economic impact.
Fake news? Swamp draining?