robinhood financial notched a legal win against massachusetts’ securities regulator as a state court judge vacated the state’s fiduciary rule which required both advisors and brokerdealers to act in customers’ best interests superior court judge michael ricciuti ruled march 30 that the state’s securities regulator william galvin “was beyond his authority” when he promulgated the fiduciary rule ricciuti declared the rule “invalid” but stayed his ruling for 30 days to permit galvin’s office time to appeal the decision a spokesperson for galvin’s office said the agency was reviewing the decision and its options robinhood was “pleased” with the court’s ruling dan gallagher the company’s chief legal and corporate affairs officer said in a statement “the massachusetts securities division has consistently mischaracterized and disparaged robinhood’s platform and customers without any legal basis” the statement said “as the court made clear the secretary’s decision to act unilaterally and reject any effort at coordinating with federal and state authorities ‘supports the conclusion that by adopting the fiduciary duty rule the secretary acted beyond his delegated authority’ contrary to the actions of the secretary in this matter we believe that market participants and regulators can best serve investors when we all work together” the ruling represents a setback for investor advocates who have encouraged federal and state securities regulators to impose stricter standards of conduct on brokers and advisors lobbying groups for the securities industry have opposed such efforts some industry commentators suggested that massachusetts’ path toward a stricter fiduciary standard was open to legal attack a handful of states such as nevada and new jersey made moves to adopt fiduciary standards after an obamaera fiduciary rule was vacated by a federal appeals court in 2018 in nevada’s case lawmakers passed legislation authorizing the state’s securities regulator to craft a fiduciary rule a process that continues the massachusetts rule took a different route with the executive branch not the legislature leading the way the state’s securities regulator adopted its fiduciary rule in march 2020 after a comment period and opposition from the securities industry the regulation made it a dishonest or unethical practice to recommend an investment strategy the opening of an account or the purchase or sale of any security without grounds to believe that the recommendation is suitable for the customer secretary of the commonwealth william galvin whose office includes the state’s securities division brought an enforcement action against robinhood in december 2020 accusing the popular trading app of breaching its fiduciary duty with regard to its customers galvin’s office sought to revoke robinhood’s license to act as a broker in the state in 2021 robinhood filed a lawsuit in state court against galvin’s office challenging the regulator’s legal authority to impose an expanded fiduciary duty robinhood’s lawsuit also contended that the massachusetts fiduciary rule was superseded by the securities and exchange commission’s regulation best interest adopted in 2019 although the regulation raised standards of conduct for brokers it isn’t a fiduciary rule galvin’s office asked the court to deny robinhood’s request to vacate its fiduciary rule according to court records the regulator’s “efforts in rulemaking to protect massachusetts investors are no ‘threat’ to any federal authority or any entity but rather are undertaken in the complementary role contemplated among federal and state securities regulators under the federal and state statutes governing securities transactions” galvin’s court filing states judge ricciuti ruled otherwise finding that the state’s fiduciary rule was at odds with common law and the sec’s regulation best interest