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Thursday, April 22, 2010

FINRA Investor Education Foundation and United Way Worldwide Announce Nearly $1.5 Million in Grants to Support Grassroots Financial Education Projects

Washington, DC — The Financial Industry Regulatory Authority (FINRA) Investor Education Foundation and United Way Worldwide (UWW) have announced nearly $1.5 million in grants to 12 recipients to extend the reach of community-based financial education programs across the country.

The grants were awarded by the FINRA Foundation as part of a new program, Financial Education in Your Community, which is administered jointly with United Way Worldwide.

In 2008, United Way focused its strategic leadership efforts on impacting the well-being of the nation's communities and announced an ambitious 10-year goal of cutting by half the number of lower-income families that lack financial stability. "We are proud to partner with United Way to expand the ability of community-based organizations to provide unbiased financial education resources and innovative programs for hardworking individuals and families," said FINRA Foundation President John Gannon. "Community groups have a unique opportunity to reach their neighbors with the information they need to make sound financial decisions that help them save and grow long-term assets."

One- and two-year grants were competitively awarded to local United Ways and other non-profit community groups that will undertake creative projects to help identify best practices for providing working individuals and families with the information they need to take action toward increasing their financial stability. The projects leverage strategic partnerships and successful existing programs, and target a diverse group of clients from areas of the country that have been hit hard by the economy.

"United Way is committed to helping working individuals and families overcome the financial hardships caused by today's difficult economic conditions," said Brian Gallagher, President and CEO of United Way Worldwide. "We are pleased to partner with the FINRA Investor Education Foundation to bring critical financial education resources to underserved communities and help families start down the path toward financial independence."

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Wednesday, April 21, 2010

FINRA Foundation Announces $1 Million in Grants to Fund Securities Advocacy Clinics

Washington, D.C. — The Financial Industry Regulatory Authority (FINRA) Investor Education Foundation today announced $1 million in grants to launch four law school clinics that will provide legal help to underserved investors involved in securities disputes. These start-up grants will help fill the gap in legal representation for investors with small claims who do not have the financial resources to obtain legal counsel. The Foundation awarded $250,000 each to:
  • Florida International University College of Law, Miami, Florida;
  • Howard University School of Law, Washington, D.C.;
  • Pepperdine University School of Law, Malibu, California; and
  • Suffolk University Law School, Boston, Massachusetts.

The FINRA Foundation chose these law schools because they are well-positioned to launch and maintain clinics that will allow supervised law students to take on securities disputes. As a condition of the grant, each law school was required to demonstrate institutional support of the clinic beyond the three-year grant program and provide investor education and outreach in their community. Students who participate in these clinics will not receive compensation, but will benefit from serving the public interest, earning course credit and gaining experience representing clients in actual cases.

"These grants will significantly expand the geographic reach of securities advocacy clinics available to investors. All four law schools will use these start-up grants to create dynamic clinics that provide a real service to investors in their communities," said FINRA Foundation President John Gannon.

These grants build upon the success of previous FINRA Foundation efforts to support securities clinics. In 2004, the Foundation funded the first securities arbitration clinic in the Midwest at Northwestern University School of Law. Northwestern also developed a guidebook for establishing law school investor advocacy clinics. In 2006, the Foundation funded a grant to the Pace Law School Investor Rights Clinic to develop and distribute an educational guide to help small, individual investors understand their legal rights and responsibilities in order to avoid disputes, or seek resolution through arbitration or mediation. Both of these resources will be used as part of this grant program.

The FINRA Investor Education Foundation is the largest foundation in the U.S. dedicated to investor education. Its mission is to provide investors with high quality, easily accessible information and tools to better understand the markets and the basic principles of saving and investing. To further this mission, the Foundation awards grants to fund educational programs and research aimed at segments of the investing public who could benefit from additional resources. Since inception, the FINRA Foundation has approved nearly $50 million in financial education and investor protection initiatives through a combination of grants and targeted projects. For details about grant programs and other FINRA Foundation initiatives, visit

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For Release:

Thursday, January 28, 2010
Nancy Condon (202) 728-8379
George Smaragdis
(202) 728-8988

Tuesday, April 20, 2010

Bill Would Add SIPC Protection To ‘Third-Party’ Ponzi Scheme Victims

Several Democratic congressmen and one Republican have introduced legislation aimed at increasing the pool of Ponzi scheme victims eligible to receive restitution from the Securities Investor Protection Corp.

The Ponzi Scheme Investor Protection Act (H.R. 5032) would require SIPC to provide up to $100,000 worth of insurance coverage to “indirect investors” in Ponzi schemes—that is, people who invested through feeder funds or other indirect sources. At the same time, however, indirect Ponzi investors who received a SIPC insurance payment would waive their right to sue the feeder fund.

SIPC, created by Congress, maintains a special reserve fund to protect customers of insolvent brokerage firms.

According to an April 15 release from Rep. Gary Ackerman's (D-N.Y.) office, SIPC currently provides coverage to direct investors. Besides Ackerman, the other primary sponsors of the bill are Democratic Reps. Ron Klein (Fla.), Dan Maffei (N.Y.), Ed Perlmutter (Co.), and Jackie Speier (Cal.), and Republican Rep. Peter King (N.Y.).

In addition to including third-party investors in SIPC coverage, Ackerman said the bill would restrict the ability of SIPC to “claw back” funds from Ponzi victims who withdrew more than they invested. According to Ackerman, SIPC currently is able to recover assets from investors harmed by Ponzi schemes “regardless of whether or not they had any involvement or knowledge of the fraud.”

Under the bill, however, SIPC would be prohibited from such action “unless the bilked investor was proven to be complicit or negligent” via their participation in the scheme. Ackerman said the provision also would be extended to cover the decisions of trustees appointed to liquidate assets in the large Ponzi schemes already uncovered. The lawmaker noted this provision would cover, for instance, Irving Picard in the liquidation of Bernard Madoff's assets.

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