SEC Approves FINRA Rule Permitting Mid-Case Referrals

By Patricia Uceda, Fall 2014 Graduate Research Assistant

LAW_IACThe SEC approved a rule change to Rule 12104 of the Code of Arbitration Procedure for Customer Disputes and Rule 13104 to the Code of Arbitration Procedure, both entitled “Effect of Arbitration on FINRA Regulatory Activities” broadening the authority of arbitrators to make referrals during an arbitration proceeding. The previous rules only permitted such referrals when a case concludes.

The approved rule change permits an arbitrator to make mid-case referrals if he or she becomes aware of any matter or conduct that the arbitrator has reason to believe poses a serious threat, whether ongoing or imminent, that is likely to harm investors unless immediate action is taken. If an arbitrator makes a mid-case referral, it must be disclosed to the parties and a party is permitted to request recusal of the referring arbitrator within three days of being notified of the referral. The new rule further provides that the arbitrator should wait until the case concludes to make a referral if he or she believes that investor protection would not be materially compromised by the delay.

FINRA filed an early version of the proposed rule change in July of 2010; however it made a few changes and published the current version for comment in the Federal Register on February 12, 2014. The SEC received twelve comment letters, including one from the GSU Investor Advocacy Clinic.  Our Clinic expressed concern Continue reading

Be Smart With Your Smart Phone

By Patricia Uceda, Fall 2014 Graduate Research Assistant

National Cyber Security Awareness MonthSmart phones are extremely popular among consumers. Loaded with lots of convenient features such as wireless internet, e-mail, and mobile apps, they have become a central means of communication for many. Unfortunately, with these increased uses comes increased information storage on cell phones, which can lead to problems if your cell phone gets in the wrong hands. In order to protect your private information, follow these tips: Continue reading

Wednesday’s Word: Malware

By Patricia Uceda, Fall 2014 Graduate Research Assistant

National Cyber Security Awareness Month

malwareMalware are software programs that are designed to damage or perform unwanted actions on your computer. They can install themselves on your computer and steal sensitive information without your knowledge, including web history, social security numbers, pin codes, and credit card numbers. This information is then transmitted to the attacker for malicious purposes such as identity theft.

In order to guard against this threat, you should use and maintain anti-virus software and a firewall. Additionally, make sure that this software is kept up-to-date as malware programs are constantly changing and evolving. Lastly, scan your computer regularly for malware and delete any unrecognized files. For more information on how you can guard against malware, go here.


Medicare Phishing Scheme Allegedly Responsible For Stealing Millions from Senior Citizens

By Patricia Uceda, Fall 2014 Graduate Research Assistant

phoneThe FTC recently helped halt a telemarketing phishing scheme that was targeting senior citizens entitled to Medicare benefits. The telemarketers allegedly called consumers and stated that they were calling on behalf of Medicare and that they were providing information about Medicare benefits. They then asked to verify consumers’ identities through use of personal information, including bank account numbers, allegedly assuring consumers that the information was being only used to verify their identity, and they would not be charged for the information provided.

However, the telemarketers allegedly instead used the information to remotely create checks drawn from the consumers’ bank accounts. Continue reading

Frontier Funds: Travel with Care

By: Brittany DeDiego, Fall 2014 Student Intern

passportBrazil and China might sound like a fun, exotic vacation spots, but should they be a hotspot for investing? FINRA has posted an investor alert for “frontier funds” that invest in developing securities markets such as Argentina, Lebanon, Nigeria, Slovenia, and Vietnam. Americans may choose to invest in foreign markets as a way to diversify and spread investment risk among foreign markets and economies, and to take advantage of the potential for growth in the emerging market. However, there is also a high risk associated with these frontier investments because of the level of uncertainty associated with these developing markets. Continue reading

Clinic Interns Provide Education on Preventing Investment Fraud

fall2014corbinOn Wednesday, October 15, 2014, Investor Advocacy Clinic student interns Ryan Corbin, Kori Eskridge, and Kristina Ludwig presented “Fraud Watch 2014: How to Spot and Prevent Investment Fraud” to a group of Georgia State University College of Law students. The event was co-sponsored by the College of Law’s Wealth Management and Estate Planning group. Corbin began by introducing the group and explaining the mission of the Investor Advocacy Clinic. He then explained that anyone with money is a target for investment fraud, driving home the relevance of the presentation. Continue reading

Friday’s Fraud: Source Credibility

By Kristina Ludwig, Fall 2014 Student Intern

sourceThough there are many different types of fraud, these schemes are often perpetuated using the same psychological tactics to get you interested and invested. One such tactic is Source Credibility, which is where the fraudster will use his name or credentials to shore up confidence in the potential victim to influence him to invest.  According to’s How to Spot the Red Flags of Fraud pamphlet, a phony seller will try to build credibility by appearing successful or attaching himself to a reputable organization. A seller might also try to dress up his office with framed diplomas or awards created in MS Paint or Photoshop, so suggests checking out the seller’s actual qualifications by following the following steps: Continue reading