Professor Iannarone and Qudsia Shafiq (J.D. ’18) Testify at SEC Committee Meeting

Both Talk About Need for Economic Justice for all Investors

Qudsia Shafiq (J.D. ’18) missed her securities regulations class on Oct. 12 for a fitting reason: She was testifying in front of the Securities and Exchange Commission (SEC) Investor Advisory Committee, advocating on behalf of the Georgia State Law Investor Advocacy Clinic and its clients.

Shafiq, along with Nicole G. Iannarone, clinic director and assistant clinical professor, served on a panel with David White, director of the Investor Advocacy Project at Seton Hall University School, at the committee’s meeting in Washington, D.C.

Committee member and Investor Advocate Rick Fleming invited Iannarone, Shafiq and White to discuss the role of securities arbitration clinics in securities markets and the clients they serve – investors who lost money from broker misconduct but cannot afford or find legal representation because their claim is too small. When introducing the panel at the meeting, Fleming shared that his office has spent time interacting with various law school clinics and felt it was important for committee members to “hear the issues clinics and their clients are confronting to help inform their advocacy efforts.”

The Investor Advisory Committee advises the commission on regulatory priorities, the regulation of securities products, trading strategies, fee structures and the effectiveness of disclosure. It also counsels the SEC on initiatives to promote investor confidence, as well as protect investor interests and the integrity of the securities marketplace.

Iannarone highlighted the value clinics provide to regular investors and the importance of generating awareness of the existing law school clinics to additional jurisdictions and increasing advocacy efforts.

“Securities arbitration clinics were created to fill an investor protection need and ensure economic justice for all investors…but we cannot meet all, or even most, of the need,” Iannarone said.

She explained that though clinic students work thousands of hours per year, it is not enough. They regularly turn down potential clients, and investors residing in jurisdictions without a clinic may have nowhere to turn.

“Unless all investors have the means or opportunity to seek redress when they are harmed by market participants, we cannot fully protect investors or ensure our markets are fair,” Iannarone concluded.

Shafiq then spoke about the Investor Advocacy Clinic’s clients and her experience working with them.

“Every semester, we receive calls from investors all over the country. Despite their different backgrounds, they all share one misfortune: they entrusted a financial adviser who ultimately failed them,” Shafiq said. “They have lost up to $100,000 of their hard-earned money and have no access to legal help because their claims are deemed too small by the industry. By the time they get to us, we’re their last option. Our help may be the only thing that makes it possible to pay the mortgage and afford medication in the same month.”

Shafiq described how regular investors have difficulties navigating the complexity of securities arbitration cases and don’t necessarily understand brokers’ roles and responsibilities. She also explained how students help restore investors’ faith in a just and equitable legal system through the arbitration and settlements they assist clients with at the clinic.

“Securities regulations were designed to protect investors like our clients, the ‘little guys,’ and the IAC, along with the other existing clinics nationwide, teach students like me how to better help the little guy not feel so ‘little’ anymore,” Shafiq said.

The committee praised the panelists and Shafiq, in particular, for their remarks and expressed support for finding ways to fund clinics.

To say Qudsia did a great job would be an understatement of enormous measure. She did us all exceptionally proud in both her prepared remarks and responses to the committee’s many questions,” Iannarone said.

“It was gratifying to hear the committee members express an interest in what we can do and honor the service we provide,” Shafiq said.

“A Once in a Lifetime Experience”

The Investor Advocate office also arranged for the panel, along with students from Howard University and Seton Hall University and clinic directors from St. John’s University and University of Pittsburg, to meet with Fleming, SEC Chair Jay Clayton, Commissioners Kara Stein and Michael Piwowar, Division of Investment Management Director Dalia Blass, Investor Advocate Ombudsman Tracey McNeil, and Associate Director of Enforcement Melissa Hodgman, among other senior SEC leadership. Both Iannarone and Shafiq called the experience a “once in a lifetime” opportunity.

Qudsia Shafiq (J.D. ’18) (from left) and Nicole G. Iannarone, Investor Advocacy Clinic, met with Investor Advocate Ombudsman Tracey McNeil (right) after the SEC Committee testimony.

“In addition to meeting these individuals and hearing how they became involved with the SEC, we were able to ask questions and really get an inside look of what the SEC does,” Shafiq said. “I thoroughly enjoyed learning more about the SEC’s three-pronged mission of raising capital, maintaining healthy markets and protecting investors, and enjoyed seeing firsthand how passionate the SEC is in making capital markets a better place for both investors and institutions.”

“The Office of the Investor Advocate pulled out all of the stops for this visit. It was an honor to speak on behalf of all the clinics,” Iannarone said. “I’m proud to be part of a community that does so much to help so many without means for economic justice.”

The panel discussion and full meeting is available on the committee’s webpage.