June 21, 2005
Investor Clinics Helping the Small Time Investor
Law students at investor clinics are helping the small time investor in claims against brokerage firms. A recent article by reporter Janet Kidd Stewart reports on eleven investor clinics throughout the country are representing investors whose claims are not large enough to interest law firms, yet may represent the life savings of some small investors.
Last year the newest program, the Investor Protection Center at Northwestern University, won a $120,000 grant from the education arm of the National Association of Securities Dealers to represent small investors and develop a model for more clinics nationwide.
"These types of cases offer our students the same complex issues [as other securities law cases], just not with as many zeros," said J. Samuel Tenenbaum, an assistant law professor at Northwestern and director of the Chicago center. Under the direction of Tenenbaum and other Northwestern faculty--including former Securities and Exchange Commission Chairman David Ruder--law students at the start-up clinic have combed through about 30 potential cases this year and are investigating four of them, Tenenbaum said.
Older centers around the U.S. report that each handle 100 to 150 investor inquiries annually and pursue up to 20 cases to arbitration or settlement. Students have responded enthusiastically to the investor protection cases. Explains Daniel Sweeney, an '05 graduate of Duquesne Law School's securities clinic, "[w]ith these cases there is a sense of urgency to do the best you can," Sweeney said. "There's added pressure because for a lot of these people the losses represent all they have and they're depending on you."
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