Last week the one-semester Investor Rights Clinic held its annual Boot Camp, where 13 second- and third-year students crammed everything from securities laws to office procedure training into an eight-hour session so they would be ready to jump into active case files and client meetings immediately.
Two women that have joined the clinic ranks of the 2016 gladiators for the needy include international student Anda Malescu and 3L Janyl Relling. Malescu, a student from Romania studying for her LL.M. in International Law, says that her country is not completely financially savvy. Janyl Relling, a third-year student with three years in the trenches of the financial services sector prior to studying law is too familiar with stories of roughshod treatment of the elderly by the industry.
"I heard horror stories from clients who suffered devastating losses due to fraud, misrepresentation, churning (executing trades to increase commission fees), twisting (pressuring a client into purchasing additional financial products), or other misconduct at the hands of brokers," says Relling. "I am anxious to gain the legal advocacy skills necessary to assist those who need representation in these types of claims."
Since the Investor Rights Clinic, led by director Teresa Verges, launched in 2012, it has opened cases on behalf of 62 mostly elderly investors, who believe they have been victims of fraud or suffered significant financial loss, but whose claims are too small for them to find legal representation. The clinic has found that some bad actors in the financial community have preyed upon retirees who have no meaningful investment experience and had their retirement savings placed in securities products far too complex or risky for their profiles.
To date, the students and supervising attorneys have recovered more than $740,000 for the investors, including a recent $80,640 award, which included $33,500 in attorneys’ fees.
Combined, the clinic’s three supervising attorneys – Verges, Scott Eichhorn, and Robert Sondak (an adjunct professor who volunteers at the clinic) – have over 60 years of securities law experience.
"The clinic gives the students real world experience, far beyond the realm of books and lectures," says Verges. "They gain familiarity with working in a law firm environment, including timekeeping and file management. They are handling actual cases with genuine clients. Although the amounts at stake are not huge, to most of the clients it is likely everything they have."
The clinic currently has 19 active cases and receives five to ten calls each month from investors seeking representation. In Tuesday's first day of action, students received case assignments. Malescu and her team of student interns are handling two active matters dealing with broker negligence and misrepresentation, and investigating another claim on behalf of a potential client.
"The legal system in Romania has not yet been able adequately to address the needs of both foreign and domestic investors," says Malescu. "Having seen the importance of private investment to economic development, job creation, and the reduction of poverty, I want to focus on the protection of investors' interests to facilitate the smooth operation of businesses and the alleviation of poverty in local communities. The clinic provides a framework toward my goal of serving investor rights protections in the U.S. and abroad."
The students are trained to represent underserved investors in securities arbitration claims against their brokers before the Financial Industry Regulatory Authority. FINRA is a self-regulatory organization that administers the largest forum for arbitration of securities claims in the United States. Arbitration is the most widely used means of resolving disputes in the securities industry.
"Our students leave here with an appreciation of the work it takes to build a case and advocate on behalf of their clients," said Eichhorn. "Many of our students have continued the work they started here with careers in the securities arbitration field."