Clinic Comments on Proposed Changes to Simplified Arbitration

As part of its mission of serving regular investors, the Investor Advocacy Clinic reviews FINRA rule proposals and submits comments after fully evaluating the proposal.  Last week, the clinic commented on FINRA SR-2018-003, a proposal that would provide additional options to investors with smaller claims to have their disputes heard by arbitrators.

The clinic’s comment, drafted by spring 2018 student interns Abigail Howd, Eric Peters, and Dowdy White, praised FINRA for taking steps to provide investors with smaller claims a third option: telephonic hearings.  Currently, investors with so-called simplified claims (damages of $50,000 or less) have two choices: either a proceeding entirely on the papers, with no ability to tell their story in person, or a full-blown arbitration proceeding.  The proposal adds an intermediate option, and the Investor Advocacy Clinic supports it.  The student attorneys also recommended mandatory, in-person training and specialized expertise for arbitrators who oversee the new proceedings.  They proposed additional changes, including renaming the overall process to “Small Claims Arbitration” instead of “Simplified Arbitration” because the student attorneys have found that their clients’ claims are anything but simple.  Finally, the student attorneys recommended that mandatory discovery be part of the new process.  Click here to read the Clinic’s comment letter in its entirety.

Investor Alert: Advance Fee Fraud

By Geoff Hafer, Spring 2017 Student Intern

The SEC receives thousands of complaints every year describing a scam known as “advance fee fraud.”  An investor will be asked to pay a fee up front before receiving any proceeds, money, stock or warrants.  This up-front fee is often described as a deposit, underwriting fee, processing fee, administrative fee, commission, regulatory fee or tax, or sometimes an incidental expense that will be paid back later.  Unfortunately, in cases of advance fee fraud, once they have your money you can bet you will never hear from them again.

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Opening Your First Brokerage Account: Am I Picking the Right Account Type for My Needs?

By Geoff Hafer, Spring 2017 Student Intern

In the last edition of the five-part series “Opening Your First Brokerage Account” we addressed the question “Do I really know all the fees associated with my account?”  Today, we will attempt to answer the question “Am I picking the right account type for my needs?”   To begin with, most brokerage firms offer at least two types of accounts, a cash account and a margin loan account (known as a margin account).

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Opening Your First Brokerage Account: Did I Ask the Right Questions?

By Geoff Hafer, Spring 2017 Student Intern

In our last edition of the five-part series “Opening Your First Brokerage Account” we addressed the question “Am I Picking the Right Account Type for My Needs?”  In this final edition, we will consider the question “Did I ask the right questions?”   Asking the right questions will help you to invest wisely and avoid potential pitfalls.  No matter what your level of investing experience, don’t be too quick to sign, after all it’s your money!

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Opening Your First Brokerage Account: Do I Really Know all the Fees Associated with My Account?

By Geoff Hafer, Spring 2017 Student Intern

In our last post in this five part series on “Opening your first Brokerage Account,” we tackled the question “Who will be managing my account?”  This week we will be addressing the question “Do I really know all the fees associated with my account?”  Investment and brokerage fees can quickly eat into your investment returns.  Whether they’re tied into the funds you’ve selected as an expense ratio, added on as a brokerage commission when you buy or sell, or charged by an adviser who is helping you sort through it all, it’s important that you know what you’re paying.  Here are some of the more common fees to be aware of:

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Opening Your First Brokerage Account: Who will be Managing My Account?

By Geoff Hafer, Spring 2017 Student Intern

In the first part of the series we answered the question, “Did I pick the right broker?”  Today we will address the next question, “Who will be managing my account?”  To answer this question, one must first understand the difference between discretionary and non-discretionary accounts.

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Opening Your First Brokerage Account: Did I Pick the Right Broker?

By Geoff Hafer, Spring 2017 Student Intern

You are about to open your first brokerage account.  “Let’s make some money,” you think to yourself.  As you are about to put pen to paper, several questions race through your mind.  Did I pick the right broker?  Who will be managing my account?  Do I really know all the fees associated with my account?  Am I picking the right account type for my needs?  Did I ask the right questions?  In this five-part series “Opening your first Brokerage Account”, I will address each of these questions in turn and hopefully better prepare you as an investor to come to the table confident and prepared.

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