FINRA Investor Alert on Bond Liquidity

By: Jason Robinson, Summer 2015 Graduate Research Assistant

The Financial Industry Regulation Authority (FINRA) recently issued an Investor Alert entitled Bond Liquidity—Factors to Consider and Questions to Ask. A liquid investment is one that can be bought and sold easily without a significant change in the price of the asset. According to FINRA, investors should realize that the market for bonds, unlike the stock market, is not “instantly liquid, and some bonds are easier to trade than others.” It is important that bondholders consider the risks associated with selling a bond before it matures as well as the factors that put pressure on bond liquidity. Continue reading

SEC Files Complaint Against Alleged Ponzi-Scheme Fraudster

By: Jason Robinson, Summer 2015 Graduate Research Assistant

The SEC recently filed a complaint concerning a Miami-based Ponzi scheme.  In 2007, Phil Williamson allegedly began to recruit investors for an investment fund called the Sterling Fund. Mr. Williamson allegedly told potential investors that there was no risk involved and that the investment would return 8-12% annually. Many of the investors in the Sterling Fund were public sector retirees who had limited experience with investing. A former police chief, two prison corrections officers and a school principal were some of the victims of Mr. Williamson’s alleged Ponzi scheme. Continue reading

Investor Advocacy Clinic Comments on FINRA Proposed Rule Change 2015-009

By: Jason Robinson, Summer 2015 Graduate Research Assistant

On April 23, 2015 the Financial Industry Regulatory Authority (FINRA) filed a proposed rule change with the Securities and Exchange Commission (SEC). FINRA proposed SR-FINRA-2015-009 which calls for the adoption of FINRA Rule 2272. The new rule “would govern sales or offers of sales of securities on the premises of any military installation to members of the U.S. Armed Forces or their dependents.” Specifically, Rule 2272 calls for these securities salespersons to conspicuously disclose in writing the identity of the member offering the securities and that the securities offered are not being provided on behalf of the federal government. The proposed rule would also incorporate FINRA’s suitability obligations.

The Investor Advocacy Clinic recently filed a comment on this rule proposal, expressing support for the proposed rule. Studies have shown that members of the U.S. Armed Forces are more vulnerable to broker misconduct than the population at large. Rule 2272’s enhanced disclosures would lead to greater transparency which would allow military personnel to make more informed investment decisions.

The Investor Advocacy Clinic offered two additions to proposed Rule 2272:

  • FINRA’s creation of a standardized Rule 2272 disclosure form
  • Expansion of Rule 2272 to sales off military installations

A FINRA standardized form would serve the rules purpose of making sure military customers are better informed and the Clinic sees no significant drawbacks to expanding the rule to on and off military installations. Click here to read the Clinic’s comment letter in its entirety along with other comment letters on the proposal.

Investor Alert: Automated Investment Tools

By Jason Robinson, Summer 2015 Graduate Research Assistant

Advancements in computer technology and the growth of internet access have made automated investment tools available to a wider range of investors. Some examples of automated investment tools are online calculators, portfolio selections services, asset optimization services, and investment management programs. While these tools can be beneficial to investors, according to a new FINRA and SEC Investor Alert on Automated Investment Tools, there are a number of risks and limitations that investors should understand before using them.

Here are five tips to keep in mind before using an automated investment tool: Continue reading

Alert Investor Magazine

By Jason Robinson, Summer 2015 Graduate Research Assistant

The Alert Investor is a new digital magazine sponsored by the Financial Industry Regulatory Authority (FINRA) whose goal is to “provide an understanding of investing that forms the basis of smart participation in financial markets.” The magazine explains financial markets, explores topical trends, and decodes complex issues for investors of all levels. The digital magazine offers a variety of articles ranging from historical pieces like, “The Methuselahs of Wall Street,” which highlights Wall Street firms that have stood the test of time, to more informative articles like, “What You’re Paying For When You Buy A Bond.” Subscribe to the magazine for free and become a more informed investor.

My Clinic Story: Jasmine Blake-Stewart

By Jasmine Blake-Stewart, Spring 2015 Student Intern

DSC_0159What a wonderful journey this has been. Being in the Investor Advocacy Clinic has been a great experience for me. Learning to work with a partner, a group, and a class in total has helped me gain more experience in the professional field. What I enjoyed most about being an intern in the clinic was trying to help the potential clients solve life financial issues. The greatest feeling is having joy after speaking with potential clients and giving them an update because in return I am being valued for my work. When someone actually expresses their appreciation it makes you want to help solve their problems with great enthusiastic. Continue reading

My Clinic Story: Darius Wood

By Darius Wood, Spring 2015 Intern

DSC_0160Working as a student intern in the Investor Advocacy Clinic this semester was a very rewarding experience. I loved that I have been able to help investors with their claims and attempt to get recourse for the misconduct of their brokers. What I enjoyed most was how different this class was from all my law school classes up until this point. Working in the clinic is more like working in a small law firm as a new associate where the partner (your professor) gives you a case and it is your job to determine what needs to be done and take the appropriate steps to complete it. But, the partner (your professor) is there to provide you with guidance along the way. Another thing I really enjoyed about the clinic was how thankful people genuinely were. Even when we could ultimately not help a person they were often excited that we took the time to research their matter and tried to form claims.

Working in the clinic helped me to develop several skills that I believe will be essential to my future success as a lawyer. I gained a lot of experience researching and analyzing claims, writing memoranda, and communicating with clients and prospective clients. Moreover, I received great feedback on almost everything I did from either my fellow interns or our professors. In fact, I have enjoyed it some much that plan to take the Investor Advocacy Clinic II in the fall.