December 2017

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There is so much to unpack in FINRA’s recent settlement with Citigroup Global Markets over its analyst ratings. (Press release here.)

The short version is that due to a glitch in one of Citigroup’s clearing firms, there was a nearly five year period when its displayed ratings for 1800 different equity securities (buy, sell, hold) were incorrect.  Buys were listed as sells; securities that weren’t covered received a rating, etc.  As I understand it, the research reports themselves were accurate – so you could probably click through to see the true rating – but in various summaries made electronically available to customers and brokers, the bottom line recommendation was wrong.  My guess – and this is just a guess – is that some brokers and customers probably figured out that the summary ratings were unreliable and made a habit of clicking through to check the research reports, but nonetheless FINRA alleges the mistakes impacted trading in various ways, including by allowing trades in violation of certain account parameters (i.e., accounts that were supposed to be restricted to securities rated “buy,” and so forth).

The problem did not go entirely unnoticed within the firm, but there wasn’t a firm…

We are at a time of year where schools are starting to make offers for professor position.

In business schools, the hiring process is more of a year-round affair than it is in law schools, but business schools have started to learn that they need to hire on the same schedule as law schools if they want to compete for the best legal academic talent. Also, a few business schools, such as the University of Georgia this year, have started to attend the AALS hiring conference.

As I explained a few years ago, working as a law professor in a business school can be a good bit different than working in a law school.

Business school legal studies positions have become more popular in recent years as law school hiring has diminished and as many law schools face financial difficulties. Personally, I have fielded dozens of calls from prospective academics and current law school professors, asking advice about getting a job teaching law in a business school.

The business school legal studies positions are quite diverse – vastly different pay scales, vastly different teaching loads, vastly different research expectations, and some are tenure-track and some are not. As such…

Most Americans now struggle to save for retirement.  The ones fortunate enough to have some savings set aside often don’t have much.  For help allocating those savings, many turn to commission-compensated stockbrokers.  In many instances, these stockbrokers give their clients “suitable” advice.  The advice might not be the best, but decent, suitable advice often helps substantially.

Of course, not all stockbrokers give suitable advice.  Sometimes, a financial adviser decides to chase a bigger commission and pushes a client into a direction that isn’t in his or her best interest.  One financial adviser coined Brown’s Law of Broker Compensation to explain the dynamic.  In short, the worse a product is for clients, the more a broker will be paid to sell it to clients.

Access to representation shifts with the amount of damages in play.  Clients with big problems can often find a eager lawyer.  Clients that suffer $15,000 in damages may struggle to find representation.  These cases are complex.  They require substantial skill and diligence to resolve.  The potential compensation for these relatively smaller cases may not motivate the private bar to provide representation.

Securities arbitration clinics provide an option.  These relatively rare clinics take on a few of…

No one will  be shocked that my last post of the year is about a court referring to a limited liability company (LLC) as a “limited liability corporation.”  It’s wrong to do so, and it’s my thing to point out when it happens.  This case is especially striking (and perhaps upsetting) because of the context of the reference.  In this 2015 case that just showed up on Westlaw (or at least, in my alerts), “Plaintiff argues that because Defendants are all limited liability corporations they must identify and prove the citizenship of their various members and that they have failed to do so.” Skywark v. Healthbridge Mgmt., LLC, No. 15-00058-BJR, 2015 WL 13621058, at *1 (W.D. Pa. July 22, 2015).  They mean LLCs, not corporations.  Okay, so far this is a pretty typical mistake.  But wait! 

In this case, the defendants did not allege the citizenship of the members of the defendants’ LLCs in their initial Notice of Removal, so the plaintiffs claimed that a filed  amendment was more than “technically defective.” In claiming the amendment was “minor, the defendants rely cited  O’Boyle v. Braverman, No. 08-553, 2008 U.S. Dist. LEXIS 62180 (D.N.J. Aug. 12, 2008), which found

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Christmas2017(MorningBeverage)

Merry Christmas to all celebrating today.  I am enjoying a white Christmas in Pittsburgh, Pennsylvania with my dad and my brother and his husband, joined later today by my son and his fiancée (who had to work the night shift last night–she’s a hospital nurse).  For the first time in many, many years–I think since before I was married in 1985–I am separated from my husband this Christmas.  He is back in Tennessee with my daughter, who celebrated her 26th birthday yesterday.  Their work schedules didn’t accommodate holiday travel this year.  My daughter, in particular, worked yesterday and will work again tomorrow.  The working world is a different place now during the holidays than it was when I was a child.

As I sit here with a blood orange mimosa on Christmas morning, that observation set me to thinking about blue laws and Christmas.  (Ann and I are thinking along similar lines this week, it seems . . . .)  A lot of folks save their shopping–including shopping for alcohol–until somewhat the last minute.  This year, Christmas is on a Monday, meaning that Christmas Eve–a prime shopping day–was on a Sunday.  I wondered whether any blue laws prevented stores…

Christmas is just a couple of days away, and we all know what that means – the end of Winter break is in sight and preparation for the Spring semester must begin in earnest!

In these last few vacation days, however, I leave you with a few articles on the changing face of the Christmas business:

The down-and-out Mall Santa reinvents himself for a modern age

Sorry. Wrap It Yourself, Say Overwhelmed Online Shops

Holiday Windows Brighten a Bleak Retail Scene, but How Long Will They Last?

Merry Christmas to all who celebrate, and for the rest of us – well, I know a great Chinese place :-)!

One of the things I have noticed in raising two young children is how both my son and my daughter are much more likely to do what I do than they are to do what I say.

For example, I’ve always encouraged my children to be active, but it wasn’t until I started running that they really started being interested in running themselves. Now, they stage mock races, love their “running shoes,” and ask which foods will make them fast. On the less positive side, when they see me looking at my phone or eating sweets, they want to do the same thing, regardless of what I say is best for them.

Similarly, I had a professor in law school who insisted that we be on-time to class. He explained all the reasons why a habit of punctuality would benefit us in our careers, but then proceeded to be late a number of times himself. He attempted to explain this away, telling us “the partners in the law firm may be late, but that doesn’t excuse lateness from you.” Nevertheless, the students did not seem to respect the professor’s cautionary tale about being late because of the own actions…

As a follow-up to my last post, the comment period on whether Non-Attorney Representatives (NARS), should be allowed to represent investors in FINRA arbitration has now closed.  By my count, fifty-seven different commentators weighed in on the issue.  Although securities industry groups and the plaintiffs’ bar often disagree over the right course, they share concerns about the impact of NARS on the forum.

For example, the Securities Industry Financial Markets Association, an organization that styles itself as “the voice of the U.S. securities industry,” cautioned against allowing NARS to represent investors in the forum, pointing out that “FINRA has no current means to measure or ensure competency, nor respectfully, should it put itself in the business of doing so” for NARS.  The Public Investors Arbitration Bar Association (PIABA), filed an entire report, arguing that FINRA should significantly restrict NARS from representing clients in FINRA’s forum.  The PIABA report also points out that a NAR’s appearance in an arbitration has resulted in an investor receiving no recovery because Kansas law prohibited the representation.  That arbitration award explained that:

The Kansas Supreme Court and the Rules of Professional Conduct have consistently and firmly held non-attorney representatives are not authorized to practice law in

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