Archive for May 20th, 2019

May 20, 2019

Lazaro Authors an Op-Ed for Investment News on FINRA Regulation and provides written testimony to Congress on behalf of PIABA

On May 14, Professor Christine Lazaro published an op-ed in the Investment News about a recent FINRA rule proposal calling for increased regulation of high-risk firms, entitled “Finra proposal to restrict recidivist behavior a good start — but more needs to be done.”

Christine Lazaro

Here is an excerpt:

More still needs to be done to protect investors. Even though firms provide advice about investors’ retirement and life savings, there is little protection for investors if the advice is bad, or even fraudulent.

In the event of a product failure, or concentrated misconduct, firms simply cannot make investors whole and a restricted fund will not last long enough to pay a string of arbitration awards resulting from the misconduct. Troubled firms will remain more likely to shut down, leaving investors with no recourse, with the key people simply moving on to new firms.

Finra must do more to ensure that firms, and those in charge of the firms, are held accountable when their brokers go astray. While this proposal is a welcome step in the right direction, until Finra defines “accountability” to mean protecting investors and making them whole, investors will not be fully protected.

Professor Lazaro also provided written testimony on behalf of PIABA to the House Financial Services Committee subcommittee on Investor Protection, Entrepreneurship and Capital Markets Committee for two recent hearings.  For the March 14, 2019 hearing, “Putting Investors First? Examining the SEC’s Best Interest Rule,” Professor Lazaro submitted a Statement for the Record discussing the SEC’s proposed Regulation BI and needed improvements to the regulation.   For the April 3, 2019 hearing, “Putting Investors First: Reviewing Proposals to Hold Executives Accountable,” Professor Lazaro submitted a Statement for the Record discussing the issue of mandatory arbitration clauses contained within contracts between investors and brokerage firms.

May 20, 2019

Greenberg’s Article Published in Arizona State Law Review

Professor Elayne E. Greenberg’s article, Hey, Big Spender: Ethical Guidelines for Dispute Resolution Professionals When Parties are Backed by Third Party Funders, has been published in the spring 2019 edition of the Arizona State Law Review.


Professor Greenberg has presented about this groundbreaking topic at the following:

Garibalidi Inn of Court  (N.J., March 14, 2019)

The Litigation Funding Forum (NYC, April 4, 2019)

ABA Annual Dispute Resolution Conference (Minneapolis, April 12, 2019)

ABA Section of Dispute Resolution Ethics Committee (Telephonically, May 6, 2019)

Below is the abstract for the article:

This first-of-its-kind paper introduces ethical guidelines and suggested practices for dispute resolution providers and neutrals when third-party funders provide financial backing for parties in U.S. domestic arbitrations and mediations. Sophisticated third-party funders have realized that litigation and dispute resolution are fast-growing, unregulated investment opportunities. Seizing these opportunities, third-party funders are now making billions of dollars in profits through their strategic investments in domestic and global litigation and dispute resolution with few ethical rules or regulations to curtail their investment behavior.3 Preferring to be secretive about the terms of their funding contracts and invisible in their work, third- party funders are flourishing, in large part, by operating below the regulatory radar.4 The funders’ behavior has been allowed to proceed invisible and unchecked because courts and dispute resolution providers and neutrals are too often unaware that a party is even receiving third-party funding. Such unawareness, however, presents a potential ethical minefield, not just for judges and litigators, but also for dispute resolution providers and neutrals.

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