Decadence in the Sun: The Fyre Festival as a Warning in the New Age of Investing, Part 2

By: Esmat Hanano, 2019 Spring IAC Intern

Welcome back to the next installment in our series on the Fyre Festival. Today, we focus on the Festival’s background and its purported goals. We will also take a look at the major players involved in organizing the Festival.

Billy McFarland and Jeffery Bruce Atkins (a.k.a. Ja Rule) were the main organizers of the Fyre Festival. McFarland intended the Festival to be a promotional event for the Fyre App, an online application for booking music artists and other entertainers. To market the Festival, the pair hired Jerry Media—a marketing company formed in 2011 an Instagram account gained widespread popularity. In addition to Jerry Media, McFarland hired Instagram models to promote the event through their own accounts and star in a promotional video for the Festival. The models that signed on to assist McFarland include Emily Ratajkowski, Kendall Jenner, Jen Selter, and Bella Hadid. These social media “influencers” were hired to specifically target millennial and Gen Z Instagrammers. Continue reading

Fire, Fire, Fire, Fire: The Fyre Festival as a Warning in the New Age of Investing, Part 1

By: Esmat Hanano, 2019 IAC Spring Intern

In 1974, the Ohio Players released the album Fire, featuring a number of hits including the titular track. As the Ohio Players sing “Fire, Fire, Fire, Fire,” you can almost imagine them trying to warn someone of danger. Fortunately, the song is focused on the band’s love interest rather than any impending inferno. But, the song could have proven useful as a warning to some unlucky investors in 2017. The Fyre Festival, a now infamous and failed music festival, tempted these investors with promises of vast riches and an unforgettable experience. Instead of the experience of a lifetime, investors were treated to an unmitigated disaster that led to numerous lawsuits against the companies involved in planning the festival, and the imprisonment of the mastermind behind the ill-fated festival.

Recently, the Festival’s spiral into chaos was chronicled in two documentaries by Netflix and Hulu. The documentaries provide an interesting look into the organizations behind the Festival and the tactics that were used. The renewed attention on the Fyre Festival, and the chaos it spawned, provides an opportunity to discuss a number of pitfalls that await investors in the rapidly-changing investing landscape of the twenty-first century. This series will focus on the background of the Festival, the tactics employed by Billy McFarland and the organizers of the Fyre Festival, and the lessons that retail investors can learn from the Festival. Additionally, this series will situate the Fyre Festival in relation to other scandals, such as Bernie Madoff’s Ponzi scheme and the controversy surrounding Theranos. As we move through each of these topics, retail investors can begin to understand how to be aware of “too good to be true offers” and what questions they should ask themselves in the age of the social-media influencer turned investment-promoter.

Georgia State Investor Advocacy Clinic Participates in SEC Summit

As part of the Georgia State Law Investor Advocacy Clinic’s efforts to represent the interests of retail investors, the Clinic regularly participates in events that highlight the experiences retail investors face in the securities industry. On April 4, 2019, student interns Brook Ptacek, Kevin Mathis, Caitlyn Scofield, Caleb Swiney, and Esmat Hanano, along with Associate Clinical Professor Nicole G. Iannarone, participated in the inaugural U.S. Securities and Exchange Commission (SEC) Investor Advocacy Clinic Summit. The SEC invited the Georgia State Clinic, along with other investor advocacy clinics from all over the country, to SEC headquarters in Washington D.C. The Summit brought together students who routinely work with retail investors to share their experiences with the SEC.

Investor Advocate Rick Fleming welcomes securities arbitration clinics to the SEC

The Summit opened with welcome remarks from Rick Fleming, SEC Investor Advocate, and Tracey McNeil, SEC Ombudsman.

Gerri Walsh, President of the Financial Industry Regulatory Authority (FINRA) Foundation, also welcomed the clinics and thanked them for the work that they do for retail investors.

Next, the students heard from SEC Commissioner Robert J. Jackson Jr. about how important the clinics’ work is and shared lessons  he learned on his journey to becoming an SEC Commissioner.

Following Commissioner Jackson’s remarks, the clinics participated in breakout discussion sessions focused on three main topics: 1) private placements and the accredited investor definition, 2) fund retail investor experience and variable annuities, and 3) combating retail investor fraud.

Esmat Hanano shares group discussion results with Summit attendees

Georgia State took part in the breakout session on fund retail investor experience and variable annuities. The students met with Marc Sharma, Chief Counsel of the SEC Office of the Investor Advocate, and Michael Kosoff, Rachel Loko, and Michael Pawluk from the SEC Division of Investment Management. During the breakout session, the students offered their thoughts on different tools that the SEC could implement to improve disclosure procedures for retail investors.  After the breakout sessions, the clinics came together to share the highlights of their sessions with the group and continue the conversation on how better to protect retail investors. Esmat Hanano represented GSU during the group session.

Over lunch, the clinics heard remarks from SEC Commissioner Elad L. Roisman. Commissioner Roisman shared his three keys to success as a young lawyer starting out on his or her career. He shared his views on some of the biggest challenges facing the SEC today and remarked on the necessity of clinics in giving voice to retail investor concerns. In the afternoon, the clinics heard from Charu Chandrasekhar, Assistant Regional Director of the SEC Division of Enforcement in New York, and Rick Berry, Director of FINRA Dispute Resolution. Director Chandrasekhar remarked on the types of cases the SEC was seeing in New York and how clinics can help with the mission of the SEC Division of Enforcement. Director Berry spoke on the role of clinics during FINRA Dispute Resolution and how they can continue helping retail investors navigate arbitration proceedings with institutional actors and broker-dealers.

Georgia State presents #NoShame at the SEC

Lastly, the clinics each gave presentations on a number of topics. The clinics were asked to give a PowerPoint presentation in a Pecha Kucha format—20 PowerPoint slides with 20 seconds for each slide. Georgia State ended the day with a presentation on empowering investors to speak up about their experiences with securities industry. The students proposed starting a social media campaign to destigmatize the conversation around money to create a community of investors sharing their experiences with each other.   The views expressed during the presentations were the presenters’ own and do not necessarily represent the views of the Commission, individual Commissioners or members of the Commission staff.  The Georgia State law presentation can be found here.

The Clinic thanks the SEC for inviting us to such an important event and allowing us to give voice to the experiences that retail investors have when dealing with the securities industry.

On the Power of Empathy

By: Esmat Hanano, IAC Student Intern Spring 2019

During my two semesters in the Clinic, I have had a number of amazing opportunities. I think the most important, and useful, opportunity was learning about how critical empathy is for a successful attorney. From helping clients reach a resolution to their disputes to advocating on behalf of retail investors in different settings, empathy plays a significant role in an attorney’s work. My experiences in the Clinic showed me how versatile empathy is for the work of an attorney. Moreover, my time in the Clinic has also taught me how to empathize with clients and how to use that empathy for the benefit of the client.

A common refrain throughout my courses in law school was that, more often than not, lawyers will have to cabin their emotions to help clients. My advocacy professors stressed the importance of remaining calm and collected during trials and appearances in court. Although this is sound advice for a court proceeding, it does not apply with the same force when interacting with a client. My time in the Clinic is evidence that empathy is a powerful tool for understanding the nature of the problem that the client is facing and for getting the client to trust their attorney.

To build a fruitful attorney-client relationship, clients have to trust their attorneys and know that they are working for their best interest. An attorney that shows empathy for their client’s situation can signal to their client that they understand the problem on a deeper level. The most impactful client interactions I have had in the Clinic were when the client simply thanked me for listening to their struggles with the securities industry. Sometimes all the client needs to move on from a bad relationship with their broker-dealer is an empathetic listener.

Empathy has other benefits beyond the attorney-client relationship. Empathy can make lawyers better advocates for their clients. When we empathize and understand the nature of the issue facing the client, we can convey those struggles to others in a more persuasive manner. The crux of effective advocacy is giving others insight into the issues our client is facing from the client’s perspective. By using empathy to convey that message, lawyers can make others understand the dispute in a way that they might not have before.

My time in the Clinic has shown me the versatile role that empathy plays in the work of attorneys, and I am excited to put my experiences in the Clinic to the test as new attorney.

Good Night, Sleep Tight, Don’t Let the Stress and Anxiety Bite

By: Morgan Schroeder, Spring 2019 HeLP Legal Services Clinic Intern

As law students, it would be safe to say that all of us have had experience with not getting enough sleep. It is well known that adults should get between seven to nine hours of sleep every night. But many times we have to stay up later to finish an assignment by a deadline or read for class. And sometimes, stress and anxiety about an upcoming exam can keep you up or wake you up in the middle of the night. We’ll sleep in on the weekend, “catch up on some sleep,” and then start the process all over again when the workweek starts back up.

Many times, sleep deprivation and anxiety go hand in hand. The less you sleep, the more anxious you are, and the move anxious you are, the less you sleep. But depriving the body of sleep for long period of times, such as during finals season, can result in more than just anxiety; it can cause serious side effects to your health. There are some side effects that can be very damaging to one’s performance in the legal profession, as well as in everyday life.

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HB 324: Puff, Puff, Passed!

By: Laura Trejo, Spring 2019 HeLP Legal Services Clinic Intern

Since 2015, registered patients in the state of Georgia have been able to use medical marijuana oil to treat certain health conditions. However, until recently, it was illegal to buy, sell, or transport the oil within the state, forcing many patients to cross state lines to obtain medical marijuana oil, breaking numerous laws in the process. On April 17, 2019, Governor Brian Kemp signed House Bill 324 into law, allowing qualified individuals to possess up to 20 fluid ounces of low THC oil.

The new law allows qualified individuals to apply for a Low THC Oil Registry Card, which allows them to possess up to 20 fluid ounces of low THC oil without fear of criminal prosecution. An adult or legal guardian of an adult who has one or more diseases specified in the law and who is a resident of Georgia is eligible for a Low THC Registry Card. Additionally, and most relevant to the clients of the HeLP Clinic, the parent or legal guardian of a minor child who has one or more of the diseases specified in the law and who is a resident of Georgia or was born in Georgia is also eligible for a registry card.

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iEvidence: How the Smartphone Can Improve Adjudication

By: Ragan Morrison, Spring 2019 HeLP Legal Services Clinic Intern

If a picture is worth a thousand words, a video must be worth a novel.  There are many cases where a recording of an event may prove decisive in a legal proceeding—whether it’s footage of a traffic intersection or from a police body-cam, a video will often tell a judge or jury just about all they need to know.  This is not a new phenomenon, but the explosive proliferation of mobile devices today means there is ever more footage of people’s daily lives, including times that may be of significance in a future legal controversy.

Courts have been adjusting to this reality, and the value of this evidence can be even greater in the more informal setting of an Individualized Education Plan (IEP) meeting at a school or a disability benefits hearing before an Administrative Law Judge (ALJ).  We in the HeLP clinic have already encountered instances where children’s classroom behavior is recorded by teachers on their phones, and we hope to use footage like this in certain cases to help prove the disability of the child and get them the financial assistance they need and deserve.

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