Interns Work with Georgia State ROTC Cadets

presentationThe Investor Advocacy Clinic has been working with the Georgia State University ROTC to provide investor education presentations to cadets. For our first presentation in spring 2014, interns Thomas Abrahamson, Timothy Guilmette and Nataliya Nemtseva presented “Take Charge of Your Financial Future.”

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Clinic Interns Participate in FINRA Rulemaking Process

dw workIn addition to their work with small investors with legal claims against their brokers, Investor Advocacy Clinic interns actively participate in the regulatory process, representing the voice of small investors. If a dispute arises between an investor and her investment broker, it generally must be resolved in FINRA’s Dispute Resolution forum.

FINRA, the Financial Industry Regulatory Authority, is a self-regulatory organization that regulates the securities industry. FINRA’s Dispute Resolution Forum is resolves more securities related disputes than any other forum in the United States.

During their time in the Investor Advocacy Clinic, interns monitor FINRA rule proposals and formally evaluate each rule proposal that might impact a small retail investor. Interns then prepare and file comment letters concerning the proposed regulation. Comment letters evaluate the proposal from the small retail investor’s perspective. Students describe their support or opposition to the proposal and often offer alternative solutions for addressing the problem FINRA seeks to resolve. Continue reading

Social Consensus: Red Flag of Fraud

By Patricia Uceda, Spring 2015 Graduate Research Assistant



In order to help investors better recognize the red flags of investment fraud and avoid becoming victims, FINRA has released another short video dealing with a common red flag of fraud: social consensus. You can watch it here.

The social consensus tactic works by preying on your ability to be influenced by others. A fraudster will try to make you believe that other people you know have already invested in the product. Often this other person will be someone well-known and financially savvy, luring the investor into a false sense of security. Or it could be someone very similar to you, in the same position as you, such as friends or family. This can also create a false sense of security, as the investor may believe that they are missing out if they don’t also invest.

It’s important to keep in mind that just because it may seem like everyone is doing something, doesn’t mean you have to join in. Everyone’s situation is different, and the fact that the fraudster is trying to influence your decision with this type of information is a huge red flag of fraud.

Understanding these common fraud tactics can help you avoid becoming a victim. Visit for more tools and resources on fighting investment fraud.

SEC’s Operation Shell-Expel Suspends Trading in 128 Dormant Shell Companies

By Patricia Uceda, Spring 2015 Graduate Research Assistant







Dormant shell companies are often used to implement investment fraud schemes such as pump-and-dump schemes. They are prime targets because of their low share price and low visibility, making them highly susceptible to market manipulation.

Recently the SEC suspended trading in 128 inactive penny stock companies as a preventive measure to ensure that they don’t become a source for pump-and-dump schemes. The dormant shell companies were located in 24 states and Canada. These suspensions are the latest in the SEC’s microcap fraud fighting initiative. Microcap fraud is essentially fraud involving penny stock companies, or companies with low (“micro”) capitalizations.

Operation Shell-Expel, the SEC’s microcap fraud fighting initiative, is an aggressive plan to clean out dormant stocks in shell companies that may be targeted by fraudsters. It was started in 2012 and is intended to stop fraud before it begins, hopefully saving investors from being victims of investment scams. The SEC Enforcement Division’s Office of Market Intelligence uses computers and data mining to scour the marketplace and identify dormant companies ripe for abuse.

Since it began, Operation Shell-Expel has resulted in trading suspensions of more than 800 microcap stocks, or 8% of the market. If an inactive company is suspended, its stock cannot be relisted unless they provide updated financial information to prove they are actually operational. If they do not, the dormant shell company remains suspended and is rendered worthless to any investment scam artists.

FTC National Do Not Call Registry: How Does It Work?

By Patricia Uceda, Spring 2015 Graduate Research Assistant






Phishing calls are a huge problem for consumers today. Phishing involves using seemingly official communications to obtain confidential information from individuals. Traditionally this was done through the use of spam emails. However, in recent years phishers have turned to the telephone, which many people mistakenly believe are not as susceptible to scams. Continue reading