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market selloff headline

Monday, March 22, 2010

USF Investor Clinic seeks justice for small investors

After a two-year battle with Charles Schwab & Co., San Francisco comedian Tissa Hami finally has something to smile about.

Last week, a financial arbitration panel awarded her $9,356, plus interest and fees, almost making up for her losses when the Schwab fund she had been assured was safe went kaput in 2008.

"I'm thrilled with the result, but I don't think I've conveyed how miserable they made my life," said the Iranian-born Hami.

It also marks another victory for the USF Investor Justice Clinic, which goes to bat for aggrieved small investors, like Hami, that private attorneys, looking for fatter payouts, are disinclined to represent.

"It's a big problem for anyone who loses money under $100,000" in questionable investment schemes, said the clinic's director, Robert Talbot, a University of San Francisco law professor.

Since its inception nine years ago, when Enron was all over the news, the clinic, funded by USF's law school and outside grants, has clawed back close to $800,000 for its clients, all free of charge. Small potatoes, perhaps, but important enough for people who can't afford to lose them.

"We'll handle cases as low as $1,000," Talbot said. "We look to help anybody who can't get a lawyer."

'For people like you': Hami's case is one of dozens referred to the project by the Securities and Exchange Commission and the Financial Industry Regulatory Authority, an independent agency that runs an arbitration system better suited to handle cases like Hami's.

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Friday, March 5, 2010

Revisiting Mandatory Arbitration in Customer Securities Disputes

Sponsored by the Corporate and Securities Law Association, the Business and Finance Society, and the Investor Rights Clinic

Join the two lawyers who argued the landmark Supreme Court decision, Shearson v. McMahon, Theodore Krebsbach and Theodore Eppenstein, along with George Friedman Director Dispute Resolution, FINRA and Robert Davidson Executive Director of JAMS Arbitration Practice for a spirited and informative discussion of the mandatory arbitration issue. As a result of the landmark Supreme Court decision, Shearson v. McMahon, 482 U.S. 220 (1987), public customers who want to access the financial markets have had to agree to a nearly universal provision requiring mandatory arbitration of their disputes. Is this in the public’s best interest? With the Obama Administration’s White Paper proposal for a study of mandatory arbitration by the S.E.C., the issue has once again made headlines.

Professor Karen J. van Ingen
Brooklyn Law School

Theodore A. Krebsbach
Founding Partner
Krebsbach & Snyder

Theodore G. Eppenstein
Founding Partner
Eppenstein & Eppenstein

George H. Friedman
Executive Vice President & Director of Dispute Resolution

Robert B. Davidson
Executive Director
JAMS Arbitration Practice

Date & Time
Tuesday, March 23
6:00 – 6:30 pm, Networking Reception
6:30 – 8:00 pm, Panel Discussion

Location directions
Brooklyn Law School
250 Joralemon Street
Subotnick Center, 10th Floor

Sponsored by the Corporate and Securities Law Association, the Business and Finance Society, and the Investor Rights Clinic

This program offers 1.5 CLE credits in the area of Professional Practice. The credits are both transitional and non-transitional.

The program is free for those who do not want CLE credit. All attendees, however, must RSVP.

Thursday, March 4, 2010

Frank Says Consumer Agency Essential in Regulatory Overhaul

By Alison Vekshin and Peter Cook (Bloomberg via BusinessWeek)

-- The Consumer Financial Protection Agency sought by President Barack Obama is an essential part of the regulatory overhaul being negotiated in Congress, House Financial Services Committee Chairman Barney Frank said.

The standalone agency, opposed by Republicans and banks including JPMorgan Chase & Co., is “very important to us” because existing regulators view consumer protection “as a second thought,” Frank said yesterday in a Bloomberg Television interview.

“The agency that has by far the most power assigned to it to protect consumers is the Federal Reserve, and they don’t do it very well,” said Frank, a Massachusetts Democrat who put the consumer agency in legislation the House approved in December.

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Wednesday, March 3, 2010

St. John's Securities Arbitration Clinic featured in the first edition of the Bloomberg Law Reports

St. John's University School of Law Securities Arbitration Clinic was featured in the first edition of Bloomberg Law Reports, student edition. The article discusses the Clinic's investor protection, advocacy and educational achievements and endeavors.

The article was written by Professor Lisa Catalano, Director, Securities Arbitration Clinic and Associate Professor of Clinical Education and Professor Christine Lazaro, Supervising Attorney, Securities Arbitration Clinic.

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Monday, March 1, 2010

Plan Advances to Bolster Fed's Role in Consumer Protection


WASHINGTON–Key Senate lawmakers are close to a deal on a legislative package to overhaul financial regulations, people familiar with the matter said, driven in part by a near-agreement to create a new consumer protection division within an unlikely body–the Federal Reserve.

Senate Banking Committee Chairman Christopher Dodd (D., Conn.) and Sen. Bob Corker (R., Tenn.) were conferring with other members of the party in an effort to sell the agreement, Senate aides said.

This is the closest the bitterly divided Senate has come to an agreement on new financial rules, and Mr. Dodd will likely have to make a hard sell on any plan that would give the Fed new powers to police the way mortgages and other products are offered to consumers. He has been one of the Fed's biggest critics and routinely blasted the central bank for failing to enforce the consumer-protection powers it already has.

"Senator Dodd is keeping members informed on how things are progressing as he has throughout this process," his spokeswoman said. "We do not have an agreement yet. He hopes to have a consensus bill in the coming days."

If lawmakers feel they have enough agreement, Mr. Dodd could introduce his bill later this week and potentially hold a vote in his committee later in the month. If other lawmakers balk at agreements between Messrs. Dodd and Corker, it could make it more difficult for them to pass legislation this year.

Democrats and Republicans have remained bitterly divided over how best to rework consumer-protection rules.

President Barack Obama has called for the creation of an independent Consumer Financial Protection Agency, which would write and enforce rules for any financial product, ranging from mortgages to credit cards to payday loans.

Many Republicans criticized the creation of such an agency, saying this would freeze up access to credit and create an unwieldy government bureaucracy. They have argued that new consumer-product rules would be best placed within the regulator that oversees nationally chartered banks.

Mr. Dodd, in an effort to get a deal, last week suggested the creation of a new division within the Treasury Department, but Mr. Corker rejected this idea. He proposed instead creating a new division within the Fed.

The division would be led by a White House appointee, have the ability to write and enforce rules, and have a separate budget. It would also give the Fed a much more direct mandate to focus on consumer-protection issues. The two lawmakers have held extensive discussions about the idea and are presenting it to other lawmakers.

If accepted, this could dramatically reshape the focus of the Federal Reserve, which for years has primarily been focused on monetary policy ahead of bank supervision and often made consumer protection an afterthought.

Republicans might be more supportive of this approach because having Fed officials involved in consumer protection would offer a broader economic perspective to any new policies.

But it could also re-trigger an anti-Fed sentiment that has rocked the central bank in the last 12 months, at one point threatening the confirmation vote of Fed Chairman Ben Bernanke. The Fed's pre-crisis efforts on enforcing consumer protection have been widely criticized.

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More Data on Brokers


The Financial Industry Regulatory Authority wants to significantly expand the data it publishes about brokers on its BrokerCheck Web site at

See the complete Investing in Funds: A Monthly Analysis report.

Finra plans to submit a proposal to the Securities and Exchange Commission to make records for brokers who leave the industry available to the public via BrokerCheck for 10 years instead of the current two years. Certain data, such as criminal convictions and some civil judgments and arbitration awards, would become permanently available.

Finra also wants to increase the number of customer complaints and legal actions that are publicly reported. Under its proposal, all "historic" complaints dating back to 1999 would be made available for any broker registered within the previous 10 years, even if he or she has left the industry.

Historic complaints generally are more than two years old and either haven't been concluded or were settled for less than $15,000. Currently, historic complaints are reported only when the broker has been involved in three or more regulatory actions or events that require disclosure.

BrokerCheck files presently include, among other things, criminal information, arbitration claims, certain civil litigation, allegations of sales-practice violations with losses of $15,000 or more, bankruptcies and regulatory actions.

—Ms. Barlyn is a reporter for Dow Jones Newswires in New York.
Email her at

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