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September 27, 2002
Lose Your Shirt in the Stock Market?
USF Law Students Could Help Get Your Money Back!
New Investor Justice Project
(San Francisco)—The University of San Francisco School of Law is opening a free clinic—designed to help investors who lost money in the stock market get it back. Law students will help handle cases against stock brokers or dealers who may have wrongfully caused their losses.
The USF Investor Justice Project will offer help to those who need it the most—small investors who have a limited income and limited access to an attorney. Clients must have a family income of less then $50,000 a year, and their loss must be less than $25,000 although there may be some flexibility with these guidelines for those who can’t find a lawyer. Cases will be handled by USF law students who have special training in the field under the direct supervision of faculty in the USF School of Law.
“When an investor opens an account to purchase securities, the investor signs an agreement which requires all disputes to be settled by arbitration,” says Robert Talbot, director of the University of San Francisco Investor’s Justice Project and professor at the USF School of Law. “But when the small, unsophisticated client tries to assert his/her rights, their arbitration or mediation can be a mess. They’re often elderly or inexperienced and cannot handle the technical requirements of the law, fact gathering or presentation. It is a perfect situation for law students to help people in need and to gain valuable experience.”
The clinic is the only one of its kind operating on the West Coast. It is officially recognized by both the National Association of Securities Dealers (which administers the arbitration and/or mediation of disputes between investors and brokers), and the U.S. Securities and Exchange Commission (SEC). Both organizations feature the Investor’s Justice Project on their websites.
Talbot anticipates most cases to concentrate on unauthorized trades, churning (the excessive buying and selling of securities to earn extra commissions) and the “unsuitability” of securities purchased for a particular investor.
“The broker or dealer is required to explore the client's financial situation and put them into securities that are appropriate for their situation,” Talbot said. “However, perhaps because of negligence, or the desire for high commissions, sometimes brokers don’t do what is best or even ‘suitable’ for their clients.”
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