 Law Students Helping to Recover Stock Market Losses
The University of San Francisco School of Law has opened a free clinic to help investors recover money lost in the stock market, with law students handling cases against stock brokers or dealers who may have wrongfully caused the losses.
The USF Investor Justice Project offers help to those who need it most—small investors with limited incomes. Law students with special training in the field will handle cases under the supervision of Professor Robert Talbot.
“When an investor opens an account to purchase securities, the investor signs an agreement which requires all disputes to be settled by arbitration,” Talbot said. “But when the small, unsophisticated client tries to assert his or 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 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 Web sites.
Talbot anticipates most cases to focus 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 clinic, with seven law students participating, already is handling several cases.
“I abhor what I am hearing in the news about stock brokers, the stock market, and the lack of trust in the U.S. economy, with people at the top being dishonest,” said Jeremy Jones, a second year law student who works in the clinic. “It’s easy for stockbrokers to break the rules, so they need to be held responsible to help restore faith in the American economy.”
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