By Kelly Robinson, Spring 2016 Student Intern
If you have been reading our blogs, you may wonder what else it is that we do at the Investor Advocacy Clinic and why we’re here. This week we’ll be discussing how an Investor Advocacy Clinic comes into existence and how it fills a very specific need in the community.
FINRA established the Investor Advocacy Clinic Program in 2007. FINRA realized there was an underserved sect of Americans who had a lack of access to justice when the damages for their investing claims were under $100,000. (If you are not already familiar with the regulatory agency, FINRA, and what it does, we have a wonderful blog post about it here). This is so because if damages are less than $100,000, it is not economically feasible for an attorney to take on the case either on an hourly or contingency basis. For example, when taking a case on a contingency basis, fees are typically about 30%, and that’s only if the case is successful. This means that the client is only able to recover 70% of their losses, again, this is assuming a win. Additionally, attorneys don’t charge on an hourly basis because of the type of work and length of time spent on these cases make it prohibitively expensive to the client. To compensate the attorney would price the client out of the services in the first place.
FINRA created the FINRA Investor Education Foundation to support innovative research and educational projects aimed at those segments of the investing public that could benefit from additional resources, such as grants to researchers and non-profits for educational programs and support.
The Investor Advocacy Clinic at GSU is one of the beneficiaries of the FINRA Investor Education Foundation as it received a grant to establish the clinic. To create the Clinic at GSU, the College of Law had to submit a project concept and application and, once approved, GSU Law was able to establish the Investor Advocacy Clinic in 2013. Currently, the GSU Law Investor Advocacy Clinic is one of eight operating clinics established by a FINRA Investor Education Foundation grant. There are several other clinics that were established outside of the grant process. No matter how they began, many of the clinics are not able to continue (whether funded by grants or otherwise), further demonstrating how hard and costly it is to represent clients with small claims, successful or not.
We have been very lucky here at GSU, not only to have the Clinic, but also to have a great community of lawyers and attorneys that realize there is a lack of access in their field and who want to help fix that. Thankfully, these attorneys are donating their time and resources to our clinic so that we are able to continue to provide services, hopefully well past the confines of the grant money. Not only does this allow us to help represent those who lack such access to justice, but we are also able to offer investor education presentations and write informative blogs such as the one you are reading right now!