"There is a simple, elegant solution. It is found in state common law, which serves to inform federal common law. The SEC can merely adopt the following rule: 'Any registered representative of a broker-dealer, and its firm, become a fiduciary to its customer when a relationship of trust and confidence is formed.' After promulgating this simple statement, the SEC could let the courts determine when a relationship of trust and confidence arises. There is already a body of common law around this issue. Of course, further guidance will likely be needed from the SEC, over time, to ensure that fiduciary obligations are not attempted to be circumscribed by the actions of broker-dealers."

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