Archive for ‘In the Media’

April 29, 2015

Movsesian Quoted in Washington Post on Thomas More

Professor Mark L. Movsesian’s post, “Thomas More, Villain,” was quoted in a Washington Post story by David Gibson,

Mark Movsesian

Mark Movsesian

Will the PBS Series, Wolf Hall, Tarnish Thomas More’s Halo?

April 21, 2015

Lazaro Quoted in On Wall Street Followup Story

Christine Lazaro

Christine Lazaro

On Wall Street followed up with another article on the DOL fiduciary duty rule proposal, focusing on rollovers and IRAs. The article, Is Your Rollover Business at Risk Under Fiduciary Plan?, written by Suleman Din, included the following quote:

It is important that rollovers and IRAs are included in the fiduciary standard now, says Christine Lazaro, director of the Securities Arbitration Clinic at St. John’s University School of Law.

“As individuals retire and are faced with the decision of what to do with the money in their employer-sponsored plans, they often seek advice from investment professionals, expecting that the advice they receive will be in their best interests,” Lazaro says. “At that point in time, when they are being advised to move their money into IRAs managed by the investment professional, it is essential that the investment professional is held to the highest standards to protect the retirement savings of Americans.

“The standards shouldn’t only apply after the money has been moved,” Lazaro adds. “If it is not in the investor’s best interest to move the money out of the employer-sponsored plan, it should be left alone. The profit motives of firms cannot and should not drive the decision to move an investor’s retirement savings out of the employer-sponsored plans.”

April 17, 2015

Lazaro Quoted in On Wall Street

Christine Lazaro

Christine Lazaro

Professor Lazaro commented on the Department of Labor’s proposed rule to extend a fiduciary standard to those providing investment advice to clients on retirement accounts in an article in On Wall Street, Tougher Rules But Flexible Comp Under New Fiduciary Proposal.  The article, written by Andrew Welsch and Suleman Din, states:

Critics should remember that the DOL had initially come out with a fiduciary standard proposal in 2010, then pulled it and spent the next five years seeking additional comment and revising rules, said Christine Lazaro, director of the Securities Arbitration Clinic at St. John’s University School of Law.

“It’s not like they’ve moved forward quickly or haphazardly, or without considering viewpoints that they needed to,” Lazaro said. “They’ve moved forward carefully and I think thoughtfully in the process.”

The DoL proposal will be filed in the Federal register and will again be open for public comment, she added. “So there will be another opportunity for anyone to voice their concerns. The fact that they are moving forward faster than the SEC on a fiduciary standard doesn’t mean they haven’t given full consideration of viewpoints that they should be considering.”

Lazaro found little in the proposal for the industry to be alarmed about.

“It does seem like the general business models will be permitted,” Lazaro noted. “There really isn’t any need to panic. The major concerns raised by the industry regarding commissions and revenue sharing, these would be permitted to continue, so long as the advice given is in the best interest of the investor.”

“There are plenty of situations where advisors are already held to fiduciary duty, such as under state common law standards. It’s not like strict standards haven’t been tested and brokers haven’t been held to these standards already. It’s not a foreign concept when it comes to brokers.”

April 15, 2015

Perino Article Cited in Reuters

Professor Michael Perino’s co-authored article on securities class action fee-setting (linkedmp below), which will be published in the Columbia Law Review, was cited in this Reuters story by Alison Frankel. A bit from the beginning:

A couple of weeks ago, I wrote about a fee opinion by U.S. District Judge Lewis Kaplan of Manhattan, who decided that a request by class counsel for 13 percent of a $346 million settlement with underwriters of IndyMac mortgage-backed securities was just too much. Even though the 13 percent request was in line with the fee deal plaintiffs’ firms had negotiated in advance of the litigation with the lead plaintiff, a public pension fund, Kaplan cut the fee award to 8 percent, based on his own experience with securities class actions and skepticism about the hours reported by class counsel.

That example is a paradigm of the problems with the current system of awarding fees in securities class actions, at least as those problems have been pinpointed in an upcoming Columbia Law Review article by law professors Lynn Baker and Charles Silver of the University of Texas and Michael Perino of St. John’s University. In “Is the Price Right: An Empirical Study of Fee-Setting in Securities Class Actions,” the professors dipped into the dockets of 434 settlements announced between 2007 and 2012, looking at (among other things) how pre-set fee agreements with counsel factored into lead plaintiff selections; how fee requests and awards varied by the volume of cases handled by different jurisdictions and even individual judges; and why judges in about 15 percent of the settlements cut the requested fees.

Their overall conclusion is that in the vast majority of cases, fees are determined after the fact, based only on the size of settlement and the biases of the court. The professors argue that their findings show one of the goals of the Private Securities Litigation Reform Act of 1995 – to encourage lead plaintiffs to exercise oversight by negotiating fee arrangements with class counsel at the onset of a case – has not been met. They also concluded plaintiffs lawyers may be exploiting market inefficiencies by requesting higher fees from courts with a low volume of securities cases. And judges who slash fee requests without real analysis of benchmarks, they said, create uncertainty that, in the long run, hurts investors because it discourages class action lawyers from investing in cases.

April 3, 2015

Sovern Authors Op-Ed in Pittsburgh Post-Gazette

Sovern Two[2]

The Pittsburgh Post-Gazette has published Professor Jeff Sovern’s op-ed, Consumers often sign contracts they don’t read or understand. The op-ed, which drew on research reported in the the article Professor Sovern wrote with Professors Elayne Greenberg and Paul Kirgis, as well as the University’s Director of Institutional Assessment, Yuxiang Liu, ‘Whimsy Little Contracts’ with Unexpected Consequences: An Empirical Analysis of Consumer Understanding of Arbitration Agreements, opens as follows:

Consumers often sign form contracts without reading them — if you don’t believe me, just drop by a car rental agency and watch what happens.

Consumers may have many reasons for not reading contracts, including that they are too long (the iTunes contract is 32 feet long when printed); that the contracts are incomprehensible (all that legalese); or that they can’t negotiate better terms.

March 18, 2015

Sovern Quoted in Los Angeles Times

Jeff Sovern

Jeff Sovern

The Los Angeles Times quoted Professor Jeff Sovern in an article, Credit-reporting firms’ accuracy push? Finally — but it’s still not enough.  The article, discussing the settlement between the big three credit bureaus and New York’s Attorney General, states:

Last week’s settlement is a step in the right direction. But it doesn’t go far enough.

“These companies still have a lot of power,” said Jeff Sovern, a law professor at St. John’s University in New York. “The Fair Credit Reporting Act favors credit-reporting agencies and creditors over consumers.”

March 18, 2015

Facciolo Authors Article in the New York Law Journal

Jay Facciolo

Jay Facciolo

Professor Jay Facciolo and Leland Solon, one of his former students, have just published an article in the New York Law Journal entitled “Sub-Adviser Fee Litigation: Will Section 36(b) Acquire Teeth?”  It deals with a wave of class action litigation under the Investment Company Act of 1940 that is gaining real traction in challenging allegedly excessive fees paid by mutual funds to investment advisers to the funds.  Successful private actions under the Investment Company Act historically have been few and far between.  This article is a followup to an article that was previously published with the New York Law Journal in October 2013.

Tags:
March 13, 2015

Philadelphia Inquirer Columnist Quotes Sovern

Jeff Sovern

 

Philadelphia Inquirer columnist Jeff Gelles quoted Professor Jeff Sovern in his column, Big 3 clean up act, but credit agencies won’t win any love, earlier this week. The column, about a settlement between credit bureaus and the New York Attorney General’s Office, stated:

Will the credit agencies finally clean up their act . . . ? Consumer-policy experts such as Jeff Sovern, a law professor at St. John’s University, have lingering doubts, because of the credit bureaus’ unique position in the market.

* * * Sovern and Ira Rheingold, executive director of the National Association of Consumer Advocates, explained in a 2013 op-ed that creditors can actually benefit if certain kinds of disputes are never solved.

“For their part, lenders may benefit when credit bureaus report consumer defaults, even incorrectly, because such reports put pressure on consumers who wish to maintain good credit ratings to pay even disputed claims,” Sovern and Rheingold wrote – describing a problem I’ve heard about repeatedly from consumers, who say they paid a small bill they didn’t really owe to preserve their credit score.

Sovern and Rheingold wrote back then that “the marketplace can penalize credit bureaus that investigate too aggressively. Credit bureaus are heavily dependent on lenders for both revenue and the information the bureaus package and sell; if a credit bureau presses a lender too hard, the lender could patronize a different bureau and withhold data about its customers.” Sovern says now that since the new settlement applies to all three bureaus, that should be less of a problem. “We will see,” he says.

Tags:
March 13, 2015

Lazaro Co-Authors Article on Regulation of Investment Advice

On March 4, Professors Christine Lazaro and Ben Edwards co-authored a post for the Christine LazaroCLS Blue Sky Blog, Columbia Law School’s Blog on Corporations and the Capital Markets, entitled “The Fragmented Regulation of Investment Advice: A Call for Harmonization.” The post is based on their article of the same title, which is forthcoming in the Michigan Business & Entrepreneurial Law Review. Here’s the start of the post:
Discussions about regulating investment advice have largely focused on whether to harmonize the laws governing two categories of individuals within the securities world—registered investment advisers and stockbrokers.  The discussion has overlooked insurance brokers who often times also provide investment advice. Lazaro and Edwards broaden the focus by arguing that harmonizing the regulation of investment advice necessarily requires reforms reaching beyond securities regulation and into insurance regulation as well.  They argue that consistent standards should govern the investment advice provided to retail investors regardless of who is giving the advice.
March 12, 2015

Lazaro Participates in SAC Podcast

Christine Lazaro

Christine Lazaro

On February 26, Professor Christine Lazaro participated in the Securities Arbitration Commentator Podcast, “WHITHER (OR WITHER) THE FINRA MEDIATION PROGRAM?” George H. Friedman, former FINRA Director of Arbitration and long-time SAC Board of Editors member, moderated the discussion. In addition to Professor Lazaro, panelists included: mediator Roger M. Deitz, Esq.; Linda Drucker, Esq., Associate General Counsel, Charles Schwab & Co. Inc.; and Joe Peiffer, Esq., Partner, Peiffer Roca Wolf Abdullah Carr and Kane, LLC. SAC chose as the topic of discussion securities mediation today, in general terms, but, more specifically, the continuing role of FINRA’s Mediation Department. FINRA’s mediation program – the first in the securities field – is celebrating its twentieth anniversary this year. Over the past two decades, over 17,000 disputes have been referred to FINRA mediation. As we enter 2015, the program is at a crossroad. The number of staff dedicated to mediation has declined and competitors have emerged in the form of other dispute resolution providers and, even, the mediators themselves.
The program began with an overview of the history of the mediation program at FINRA. The conversation turned next to the contribution that technology now makes to securities mediations and the prospects for the future. Mr. Friedman ended the mediation podcast with a roll call of the panelists on what they foresee for securities mediation and FINRA’s Mediation Department five years from now.
Follow

Get every new post delivered to your Inbox.

Join 76 other followers

%d bloggers like this: