First-Hand Advocacy: Clinic Fellows Travel to D.C., Push for Investor Rights on Capitol Hill, at SEC

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Investor Rights Clinic Fellows Daniel Guernsey and Andrew Zuckerman met with the commissioner of the Securities Exchange Commission and spent time with Congressional staffers on a recent trip to Washington, D.C., with the director of Miami Law’s Investor Rights Clinic, Teresa Verges.

Teresa Verges, Andrew Zuckerman and Daniel Guernsey in Capitol Hill

It was two unique opportunities to advocate on behalf of retail investors, meeting with both the Securities and Exchange Commission and Congressional staffers on consecutive days.

Attended SEC Investor Advisory Committee Meeting

The IRC fellows joined student interns from seven other law school securities arbitration clinics at the public meeting of the SEC’s Investor Advisory Committee.  On the IAC’s agenda was a discussion of the critical role of law school clinics in providing assistance to retail investors who suffer losses due to broker misconduct, but who cannot find legal representation due to the size of their claims (usually under $100,000).

The IAC welcomed the law school interns and thanked them for their service on behalf of small claim investors during this unique opportunity. The SEC committee recommended that the SEC pursue legislation and other measures to provide continued funding for existing law school clinics, and to expand assistance to small claim investors in underserved areas.  

Recognition of 5 Million in Recoveries by Law School Clinics

The committee also observed in its written recommendation that law school clinics have provided legal representation or counseled thousands of individuals, and have recovered over $5,000,000 on behalf of investors, while providing guidance to hundreds of others through financial outreach and education.

“It’s clear to me that these student advocates are making a real difference, and helping retail investors who would not have access to legal services otherwise,” SEC Commissioner Kara Stein said. “I support the effort to help these law school clinics continue to help retail investors throughout the country.”

“Spending the day at the SEC was a tremendous opportunity that further reinforced the connection between the things we do at the clinic and how they affect individual investors and the investing public at large,” said Zuckerman, J.D. ‘19.

“The clinic has exposed us to so many different types of cases that we could relate to many of the issues that the market experts testified about during the open meeting. It was very rewarding to observe that the issues we help our clients with on a daily basis are the same issues actively being discussed by top market professionals and on the forefront of the SEC’s agenda.”

Personal Meeting with Head of SEC

The students also had the opportunity to meet separately with the SEC’s Chairman Jay Clayton and Commissioners Hester Peirce, Michael Piwowar, and Kara Stein.  

“Given the demands on their time, we appreciated the opportunity to meet with Chairman Clayton and the other commissioners and ask them questions about current issues impacting investors and the securities markets generally,” Guernsey said.

Guernsey and Zuckerman also advocated investor interests before Congressional staffers on Capitol Hill during the annual Hill Day sponsored by the Public Investors Arbitration Bar Association. PIABA members are attorneys who represent investors harmed by broker misconduct. Guernsey, Zuckerman, and Verges joined 55 other student interns and PIABA attorneys, who participated in over 100 meetings with Congressional staffers.

Hill Day and Lobbying Congress for Investor Interests

Long before Hill Day, Guernsey and Zuckerman had spent hours reviewing and analyzing public arbitration awards and broker registration data to provide the statistics on unpaid arbitration awards for PIABA’s latest report on this long-running problem.

The new report, “Unpaid Arbitration Awards:  The Case for An Investor Recovery Pool,” shows that on average, one-third of investors who won their cases in arbitration before the Financial Industry Regulatory Authority collected nothing. The total amount of unpaid awards for the years 2012 through 2017 reached $200 million.

During Hill Day, Guernsey and Zuckerman joined other PIABA attorneys in numerous meetings to advocate in support of legislation that would create an investor recovery pool funded by a portion of the penalties FINRA collects against member firms for violations. Guernsey and Zuckerman also advocated in support of a fiduciary duty of care for brokers towards their clients, and against mandatory arbitration.  

Spreading Awareness of Problem of Unpaid Awards

“On Capitol Hill, I realized that many of our Congressional representatives were unaware of the unpaid awards issue and its serious impact on retirees who, having gone through arbitration to recover losses, still lose out,” said Guernsey, J.D. ‘19. “Staffers from both political parties were open to ideas on solving this problem, which shows that efforts like Hill Day can lay the groundwork for positive change.”

“We had back-to-back meetings with Senate and Congressional staffers and, in most of those meetings the attorneys I was paired with allowed me to take the lead,” said Zuckerman. “The experience was extremely confidence building, as it forced us to think fast, improvise and be persuasive all while working with a rotating group of attorneys we had never met before. I was so energized at the end of our appointments that I felt I was ready to lobby every member of Congress.”

“Overall it was an exhilarating two days of investor advocacy for our Fellows,” said Verges. “Although we provide our interns with first-hand experience and training in handling live-client cases, opportunities like the SEC’s open meeting and Hill Day demonstrate alternative approaches to investor and client advocacy.”

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