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Northwestern Provides Roadmap to Help Small Investors

November 9, 2009 | by Jasmine Rangel
CHICAGO --- A Northwestern University School of Law center that caters to the legal needs of small investors is sharing its know-how in a detailed manual for law schools interested in creating their own investor protection clinics.

During one of America's roughest economic storms, the Investor Protection Center in Northwestern's Bluhm Legal Clinic provides legal assistance to investors with limited income whose claims against brokers, banks or financial advisers is less than $100,000. Most claims are resolved through arbitration.

With funding from a grant provided by the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation, the center, now in its fourth year, has published "Guidelines for Establishing a Law School Investor Advocacy Clinic."

"The need for an investor protection clinic in the Chicago area, a major financial center, is apparent, especially with the uproar in the markets last year," said J. Samuel Tenenbaum, founder and director of the Investor Protection Center. "And we are especially interested in sharing our know-how with law schools in parts of the country that have many investors in need of legal help and few resources to help them."  

The guidelines have been delivered to leading law schools throughout the country.

Northwestern's Investor Protection Center, which handles cases on a nationwide basis, is one of about a dozen such legal clinics in the United States; all but three are located in New York.

The center fits with Northwestern Law's "Plan 2008: Preparing Leaders for the Changing World." The exhaustive analysis of what is needed to succeed in today's legal environment stresses experiential learning in law school.

Under the supervision of Tenenbaum, through the Investor Protection Center, second- and third-year law students analyze and resolve requests from investors.

Students get invaluable experience interviewing and counseling clients, explaining the arbitration and mediation process, investigating and selecting potential arbitrators, conducting discovery and negotiating settlements.

The opening of the center, through FINRA Foundation funding, followed an initiative by the New York State Attorney General's office that resulted in the creation of the large number of investor protection clinics at law schools in the state of New York.

"We provide a much-needed service to investors in the Midwest, especially during this time of economic distress, while giving students practical experience in an important area of law," Tenenbaum said.

Tenenbaum and Thomas Morsch, founder and director emeritus of the Small Business Opportunity Clinic, authored the guidelines. Staff from the FINRA Foundation and David Ruder, former dean of the law school and former chairman of the Securities and Exchange Commission, provided valuable input as well.

For more information on the Investor Protection Clinic at Northwestern University School of Law, go to www.law.northwestern.edu/investorprotection/

Topics: University News