A federal judge has struck down Missouri investment regulations championed by Republican Secretary of State Jay Ashcroft that sought to expose financial institutions prioritizing “woke politics” over returns. The rules required written consent from customers before considering non-financial objectives in investment decisions. The state’s prominent business group lauded the ruling as a win for free enterprise, stating the regulations would have burdened investment firms in Missouri.
Ashcroft had focused on highlighting firms using environmental, social, and governance principles in their investments. The rule was challenged by the Securities Industry and Financial Markets Association, which argued it was preempted by federal laws and violated free speech rights of investment professionals. The court found the rule unconstitutionally vague, preempted by federal laws, and a violation of the First Amendment.
Ashcroft, who finished third in the August Republican gubernatorial primary, announced his candidacy for governor while promoting the rules. Despite the court’s decision, he expressed intentions to appeal, stating the ruling puts Missouri investors at risk. However, the securities industry described the ruling as a major victory, citing existing federal laws requiring financial professionals to act in the best interest of their customers. They deemed the Missouri rules unnecessary and confusing.
Overall, the court ruling against Missouri’s investment regulations has sparked debate about the balance between investment transparency and free speech rights, with implications for the future of social investing policies in the state.
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