Investor Advocacy Clinic Helps Build Your Confidence as a Lawyer

By Kelly Robinson, Fall 2015 Student Intern

The Investor Advocacy Clinic was a great success for me. I really enjoyed being exposed to the firm environment and becoming acquainted with what will be expected of me in my career. I really enjoyed working with clients, as I had not had a chance to do that before and the clinic allowed me to practice with clients in a variety of different environments, such as performing an intake interview and preparing them for discovery. While it was an extremely nerve-wracking experience for me, it was also very valuable because I now have a frame of reference for future interviews and interactions with clients.

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Investor Advocacy Clinic Students Successfully Mediate Case Telephonically

Georgia State Law students participating in the Investor Advocacy Clinic represent investors in all aspects of Financial Industry Regulatory Authority (FINRA) arbitration proceedings, from initial client interviews through arbitration hearings, including telephonic mediation.

The terms of the standard agreement between brokers and their customers requires investors to arbitrate most claims before FINRA. The forum offers parties in active arbitration cases free or low-cost telephone mediation for claims of $50,000 or less.

Under the supervision of assistant clinical professor and clinic director Nicole G. Iannarone, students were preparing for an arbitration hearing when they learned they would be part of a telephonic mediation. Though the nontraditional medium was out of the norm, they were up for the challenge.

“We prepared the way you would for any trial,” said Michael Williford (J.D. ’17). “We figured if we prepared for an arbitration hearing, we couldn’t be unprepared for mediation.”

The students created trial notebooks on the facts of the case, damages calculations and roughly 500 pages of documents including tax returns, industry reports, broker disciplinary reports and other supporting documents. After preparing the notebooks, they fully understood all aspects of the case, but they realized conducting mediation over the phone would present unique challenges to advocating for their client, Iannarone said.

“When you are face-to-face you have more of an opportunity to build a relationship with the mediator and paint a picture of your client and their case,” said Kelly Robinson (J.D. ’17). “Another bigger issue was that the mediator wasn’t in the room to examine the information that was outlined in the documents. While we were able to send a short memo about the story of the case, we couldn’t include all 500-plus documents that we were relying upon the mediator referencing.”

Despite the challenges presented by the format, the students adapted and adjusted their strategies to the situation at hand.

“The takeaway for me, aside from developing some valuable skills, is that you have to prepare, prepare, prepare, and even then you have to be able to shift your strategy on the fly as things unfold,” Williford said. “It is not a static or entirely predictable environment, but that’s what makes it exciting.”

Robinson believes her experience will help her become a better lawyer.

“The clinic does a great job emulating a firm environment. We are responsible for determining the next steps from potential client intake to closing the case,” she said. “When I started the clinic, the idea of calling a client and asking about their case was terrifying. Now, I’m completely confident when speaking with clients and have even gained experience arguing with opposing counsel over discovery disputes, something I never thought I would able to do my second year of law school.”

Iannarone commended her students for how they handled the case.

“They did an excellent job for their client,” she said. “The client’s interaction with the students when the case ultimately ended says it all: the students offered the client a handshake, which was refused in favor of a hug.”

Investor Advocacy Clinic Builds Lawyering Confidence

By Kelly Robinson, Spring 2016 Student Intern

What’s really incredible to me is how much I’ve learned during my time in the Investor Advocacy Clinic. I don’t know that I have ever learned so much in such a short period of time. For example, I had no experience in working with clients when I first started, to now being completely comfortable working with clients and even arguing with opposing counsel. The clinic has also taught me the importance of seemingly basic office tasks, such as maintaining files and tracking correspondence and time. While these ministerial tasks may not seem to hold much importance initially, I’ve learned that those are the things that really keep everyone both happy and on the same page (teamwork is key!).

It was also a really unique experience to be able to work with the type of clients we do in the clinic. To know that we were able to help those who would otherwise had no other access to relief was really fulfilling. I also gained valuable insight into alternative dispute resolution forums; an area that I feel students are not necessarily exposed to in the core legal curriculum. We gained experience in preparing for both mediation and arbitration and we were even able to successfully negotiate a settlement on behalf of one of our clients!

The greatest improvement that I gained from the clinic was building my own confidence. I first joined the clinic during the beginning of my 2L year. Everything about the practice of law still felt very new to me, but the clinic has greatly prepared to me think, walk, talk, and act like an attorney. In a way, I feel like a lifetime has passed between our first foray into the clinic during boot camp and where we are now. While the clinic can be a lot of work, I will certainly miss my time working with my team, the professors, and the clients of the Investor Advocacy Clinic.

Investor Advocacy Clinics

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!

What’s in a name? That which we call a Certified Financial Planner, by any other name, may not smell as sweet

By Kelly Robinson, Spring 2016 Student Intern

Shakespeare made a variation of this line famous in his play Romeo and Juliet, indicating that a name is an artificial and meaningless convention. However the sentiment can be lost if the person handling your money isn’t who you thought they were based on this designation. So what is a Financial Planner and what does that name mean for you and your money?

The designation of financial planner can be confusing, as it is a phrase that can encompass a variety of skills and services. Some financial planners may have no training in finances whatsoever and are completely unregulated. Others may be regulated under other professional designations such as investment advisers and accountants, who are be regulated by the SEC and the state Board of Accountancy, respectively. Some others have earned the designation of a Certified Financial Planner (CFP) and are subject to strict standards to both earn and maintain their CFP designation.

Just to put into perspective “what’s in a name,” to earn the title of Certified Financial Planner, the Certified Financial Planner Board of Standards requires the following: at least a bachelor’s degree from an accredited university, three years of full-time personal financial planning experience (2,000 hours equals one year for a total of 6,000 required hours), completion of a CFP-board registered program (or holding one of few graduate degrees related to finances), pass a final certification examination, and finally attend thirty hours of continuing education classes every two years.

So what does this mean for you? Clearly, the range of services and skill sets varies quite a bit. This is why it is important to do your homework and determine what type of planning you are looking for. If you are focusing on one particular aspect of your finances, versus looking for a more comprehensive life plan, you may not need the extra services (and extra cost) that a CFP offers. Additionally, it’s important to consider that the higher the designation, the higher the regulation, so you might have more protection in working with a more highly regulated professional (however, that NEVER eliminates all risk). Finally, it’s important to consider that if a financial planner offers products, they have an incentive to recommend those products. Keep these factors in mind as you look for a professional to help you achieve your goals. If you have a particular person in mind that you’d like to hire, you can look up their designation using FINRA’s Profession Designation tool to determine exactly how (or if) they are regulated.

FINRA Enforcement Part 2: Market Regulation

By Kelly Robinson, Spring 2016 Student Intern

In our previous post FINRA Enforcement Part 1: Member Regulation we discussed how FINRA ensures compliance with firms and individual brokers. While member regulation is an important aspect of FINRA’s enforcement of industry rules, those rules don’t matter much if market itself is unregulated. Today, we’ll be discussing what steps FINRA takes to ensure integrity in the securities market.

FINRA provides oversight and regulatory services for equities and options markets (most notably NASDAQ and the NYSE) and monitors trading activity of a variety of securities such as corporate bonds and municipal securities. FINRA implements surveillance programs within these markets and is able to analyze orders as they move through the market. This surveillance system then looks for suspicious activity using highly sophisticated technology. Currently, FINRA’s Market Regulation Department monitors approximately 99 percent of the equities market and approximately 70 percent of the options market.

Another aspect of market regulation involves examining firms and bringing disciplinary actions against non-compliant firms and their associated persons. To see what is of priority in the 2016 exam check out the 2016 Regulatory and Examination Priorities Letter. If FINRA determines there are violations, the Market Regulation Department files a complaint with the Office of Hearing Officers, an independent department from FINRA Market Regulation Department. There is then a three-person panel who hears the case with each side offering evidence. At the conclusion, the panel determines whether violations have occurred and if so, what sanctions should be put in place.

Without such enforcement, investors would be wary of entering the securities market and may find themselves subject to a lot more fraud. Additionally, market regulation allows some investors to achieve restitution. Just to put in perspective the kind of impact FINRA has had on the market: in 2014, FINRA brought 1,397 disciplinary actions against registered individuals and firms, and levied $134 million in fines. As a result, FINRA expelled 18 firms from the securities industry and was able to order $32.3 million in restitution to harmed investors.

FINRA Enforcement Part 1: Member Regulation

By Kelly Robinson, Spring 2016 Student Intern

“Rules are meant to be broken” is not a mantra to live by if you’re a firm or broker (“member”) who sells securities to the public. This is so because members must be licensed and registered by FINRA, the regulatory authority that ensures compliance with their rules, as well as the SEC’s. FINRA enforces these rules with the authority fine, suspend, or even bar brokers from the industry. Enforcement not only keeps members on a level playing field, but also instills consumer confidence in the securities market as a whole.

Part of enforcement involves catching problems before they start, which is what FINRA tries to accomplish through the Membership Application Program or MAP. Once a firm applies for membership, the program ensures the firm has met the standards for admission by examining such aspects as supervisory procedures and the adequacy of communication and operational systems. Sometimes catching the bad guys before they start isn’t always possible, but FINRA also tries to combat bad behavior by subjecting brokerage firms, branch offices, and registered representatives to exams at least once every four years. The process involves examining core areas of the firm’s business with a special focus towards heightened regulatory risks.

FINRA also investigates individual registered representatives for issues with compliance in areas such as excessive trading and misrepresentation. These investigations typically arise from customer complaints, but may also come from automated surveillance reports or as a result of findings in an examination of the firm like that mentioned above. These investigations may lead to the filing of a formal complaint or to settlement of the issue with FINRA through an Acceptance, Waiver, and Consent form (click here for an example).   These investigations not only protect consumers, but also inform future regulatory rules and practices.