Twenty Years After Shearson/American Express v. McMahon: Assessing Investors' Remedies
Twenty years ago, the U.S. Supreme Court altered the landscape for investors’ remedies when it held, in Shearson/American Express v. McMahon, that brokerage firms could enforce predispute arbitration clauses in customers’ account agreements and require the arbitration of federal securities law claims. Since then, a proliferation of new investment products and new methods of trading has revolutionized the securities industry. These developments have led to a sizable increase in the number of retail investors: in the United States today, half of all households invest in stocks, either directly or through mutual funds. Likewise, Americans increasingly depend on their investments to achieve their financial goals.
This conference assesses the effectiveness of investors’ remedies for securities fraud and other forms of misconduct committed by corporate issuers, broker/dealers, and mutual funds, both in arbitration forums and in the courts. In addition, a panel of distinguished academics, regulators, and practitioners will address current legal and regulatory issues in a round table discussion of current state of securities arbitration.
- 8:00-8:45 a.m. - Registration and Continental Breakfast
- 8:45-9:00 a.m. - Welcome by Louis D. Bilionis, Dean & Nippert Professor of Law, University of Cincinnati College of Law
- 9:00 -10:30 a.m. - Panel 1: Consumer Arbitration: The Fundamental Issue of Fairness
Consumer arbitration, including securities arbitration, has its supporters and detractors in the debate over the fairness of the process. Four recognized scholars present their views on this topic. Moderator: Jill Gross, Pace University School of law
Presenter: Jeffrey Stempel, UNLV, Developing Fairness Protocols for the Era of Mass Arbitration
Presenter: Edward J. Brunet, Lewis and Clark School of Law, Substantive Fairness in Securities Arbitration
Commentator: Stephen J. Ware, Kansas School of Law
Commentator: Jill Gross, Pace University School of Law
- 10:30-10:45 a.m. - Break
- 10:45 a.m. -12:15 p.m. - Panel 2: Investors' Remedies: Arbitration and Litigation
While investor-broker disputes go to arbitration, other investors may have judicial remedies. This panel explores how investors are faring in the courts. Professor Bullard explores remedies against investment fund managers. Professor O'Hare analyzes the state of investors' remedies after Merrill Lynch, Pierce, Fenner & Smith v. Dabit (U.S. 2006). Moderator: Barbara Black, University of Cincinnati College of Law
Presenter: Mercer E. Bullard, University of Mississippi School of Law, Mutual Fund Shareholder Claims: All Bark, No Bite
Presenter: Jennifer A. O'Hare, Villanova University School of Law, The Retail Investor and the Anti-Fraud Provisions of the Federal Securities Law
Commentator: Barbara Black, University of Cinicnnati College of Law
- 2:15-12:45 p.m. - Lunch at the University of Cincinnati Faculty Club
- 12:15-1:45 p.m. - Roundtable: The Current State of Securities Arbitration
The securities arbitration process has changed dramatically in 20 years and continues to do so. In recent months, the SEC approved NASD Regulation?s rewrite of its Code of Customer Arbitration to make it more user-friendly, and other revisions may be forthcoming. In addition, the expected merger of the regulatory arms of NASD and NYSE means that there will be one SRO arbitration forum. The panelists discuss the implications of these and other developments and answer questions from the audience. Catherine McGuire, Associate Director and Chief Counsel, Division of Market Regulation, SEC
Linda D. Fienberg, President, NASD Dispute Resolution
Joseph Borg, Alabama Securities Commissioner and President, North American Securities Administrators Association (or his representative)
Philip M. Aidikoff, Esq., Aidikoff, Uhl & Bakhtiari, Beverly Hills, CA
Kenneth E. Meister, Senior Vice President and Deputy General Counsel of Prudential Equity Group, LLC
- 3:45-4:00 p.m. - Closing Remarks by Barbara Black , University of Cincinnati College of Law
- Miriam H. Baer: Acting Assistant Professor, NYU School of Law
- Jayne W. Barnard: James Goold Cutler Professor, College of William and Mary, Marshall-Wythe School of Law
- Lissa Lamkin Broom: Professor, University of North Carolina School of Law
- Lawrence A. Cunningham: Professor, George Washington University Law School
- Tamar Frankel: Professor and Michaels Faculty Research Scholar, Boston University School of Law
- Franklin A. Gevurtz: Distinguished Professor and Scholar, University of the Pacific, McGeorge School of Law
- Peter J. Henning: Professor, Wayne State University Law School
- Kimberly D. Krawiec: Professor, University of North Carolina School of Law
2007 Symposium Participants
- Philip M. Aidikoff, Esq., Aidikoff, Uhl & Bakhtiari, Beverly Hills, CA.
A graduate of Southwestern School of Law, Mr. Aidikoff is a partner at his law firm, exclusively representing clients in securities arbitration and litigation. He is past president of the Public Investors Arbitration Bar Association and is a member of its Board of Directors. Currently, he is serving a two-year term as chairperson of the National Arbitration and Mediation Committee of the NASD, which provides recommendations on rules, regulations, and procedures governing arbitrations, mediations, and dispute resolution. Mr. Aidikoff has authored or co-authored numerous articles on issues of interest to investors and attorneys, and has also appeared on news channels including CNBC, CNN/fn, and the PBS Nightly Business Report. (Photo not available.)
- Barbara Black, Charles Hartsock Professor of Law and Director of Corporate Law Center, University of Cincinnati College of Law.
Prior to joining UC this summer, Professor Black was a professor at Pace University School of Law, founder/co-director of the Securities Arbitration Clinic, and co-director of the Pace Investor Rights Project. She has written a number of law review articles on securities arbitration, securities fraud and RICO claims that have been frequently cited, including by both the majority and dissenting opinions in the Supreme Court's opinion, Basic, Inc. v. Levinson, on fraud on the market.
- Joseph Borg, Alabama Securities Commissioner and President, North American Securities Administrators Association.
Mr. Borg and his team have gained national prominence in closing down unscrupulous microcap stock brokerage firms and prosecuting investment offenders. He was a key leader in the implementation of the Wall Street settlement of $1.2 billion. In addition to state and national recognition, Mr. Borg's expertise is sought afte internationally, enabling him to participate on committees at the United Nations, the International Organization of Securities Commission, and the Council of Securities Regulators of the Americas.
- Edward J. Brunet, Henry J. Casey Professor of Law, Lewis and Clark Law School.
Professor Brunet is an accomplished litigator, professor, and author, having written numerous publications on subjects as diverse as environmental alternative dispute resolution to class actions and employment arbitration. He teaches classes on civil procedure, antitrust law, and dispute resolution. His work has been published in numerous law reviews.
- Mercer E. Bullard, Assistant Professor of Law, University of Mississippi School of Law.
Recognized as one of the nation's leading advocates for mutual fund shareholders, Professor Bullard was named by Investment News as one of the 25 most powerful voices in the financial services industry. He is the founder of Fund Democracy, a nonprofit that serves as an advocate and information source for mutual fund shareholders and their advisers. In addition, he has written for TheStreet.com, Barron's, SmartMoney.com, Investment Advisor, On Wall Street, Investment News, law reviews and other publications. He also served as Assistant Chief Counsel in the SEC's Division of Investment Management.
- Linda D. Fienberg, President, NASD Dispute Resolution.
Many years of experience led Ms. Fienberg to her current position with NASD Dispute Resolution. In this position she is responsible for NASD's alternative dispute resolution program. She also serves as executive vice president and chief hearing officer of the organization. Before assuming her current position, Ms. Fienberg was a partner at the Washington, D.C. firm of Covington & Burling, following 11 years at the Securities and Exchange Commission.
- Jill Gross, Associate Professor of Law, Pace University School of Law.
Professor Gross is the director of the Securities Arbitration Clinic and the Pace Investor Rights Project. She has worked at several New York law firms, representing clients in white collar criminal and SEC enforcement investigations/ prosecutions and civil proceedings, including securities arbitration, mediations, and trials. In addition, Professor Gross has provided legal consulting services to practitioners on securities arbitrations. A published author, her work on dispute resolution has appeared in numerous law reviews and other publications.
- Catherine McGuire, Chief Counsel, Division of Market Regulations, U.S. Securities and Exchange Commission.
In her position as chief counsel, Ms. McGuire directs a staff of attorneys responsible for many complex areas of law affecting domestic and international securities markets. She is also responsible for a variety of special projects that encompass significant policy and legislative initiatives. Ms. McGuire is a sought after speaker on a variety of topics, including financial services reform, internet securities trading, suitability issues, soft dollars, securities arbitration, and government securities regulation. (Phot not available.)
- Kenneth Meister, Senior VP and Deputy General Counsel of Prudential Equity Group, LLC.
Mr. Meister supervises the Litigation and Arbitration Group at Prudential Equity Group, LLC, advising on employment and regulatory matters. A member and past chairperson of the Securities Industry Association Litigation and Arbitration Committee, he has participated on numerous task forces and ad hoc advisory committees. His most recent assignment has been as a member of the NASD's Neutral Roster Task Force and as an SIA representative in connection with the NASD's proposed Public Disclosure Program. A sought after participant at conferences and symposia, Mr. Meister speaks on a variety of topics, including major liabilities, regulatory investigations, arbitration, and mediation.
- Jennifer A. O'Hare, Professor of Law, Villanova University School of Law.
Professor O'Hare has extensive experience in the area of corporate and securities law. Prior to entering academia, she practiced with the New York office of Jones, Day, Reavis & Pogue. She writes in the area of securities regulation and has published in many law reviews. She also serves as co-editor of Corporate Acquisitions Ideas and co-author of Corporate Acquisitions, Mergers, and Divestitures.
- Jeffrey Stempel, Doris S. and Theodore B. Lee Professor of Law, William S. Boyd School of Law,
University of Nevada-Las Vegas. Professor Stempel teaches civil procedure/alternative dispute resolution, evidence, professional responsibility, and insurance law and has authored numerous books, articles, and features. He previously taught at Brooklyn Law School and Florida State University College of Law. Prior to entering academia, he clerked for federal judge the Honorable Raymond J. Roderick of Pennsylvania and was in private practice with Maslon, Edelman, Borman & Brand in Minnesota.
- Stephen J. Ware, Professor of Law University of Kansas School of Law.
Professor Ware has held a distinguished career in law, teaching at numerous law schools including William & Mary, the Ohio State University, the University of Alabama, the University of Kansas, and Samford University. Prior to his teaching career, he worked for Davis Polk & Wardwell in New York and clerked for the Honorable J. Daniel Mahoney, U.S. Court of Appeals, Second Circuit. He is the author of numerous law review articles and books.