| 28 January 2010

From the believe it or not file we bring you news from FINRA that they have awarded $1 million to four schools to fund legal clinics for poor investors. That's right, FINRA figures that those "who do not have the financial resources to obtain legal counsel," deserve their day in court. Law schools at Florida International University, Howard University, Pepperdine University and Suffolk University each received $250,000 to establish these clinics.

I'm sure we're going to hear it from FINRA and all the FINRA lovers out there on this one. After all, it sounds like such a kind and benevolent thing to do: donating large sums of money to Universities to help "underserved investors" fight the fight. But this news raised two interesting questions in the BNB garage this afternoon. First, if you can't afford legal counsel, then what are you doing investing your money (and poorly at that)? Second, why doesn't FINRA put more effort into preventing fraud and fighting the cases themselves than funding private clinics to clean up the mess?

Wait! Before the cackle of naysayers drowns out our points, let us explain. I mean, we get it: some people get swindled and they lose all of their money and they can't afford representation precisely because, duh, they lost all their money. But the fact is, if you've actually been swindled by a genuine swindler, then congratulations my friend, you get a government prosecutor on your case!

Or let us say it another way, if you've been hustled by a Ponzi scheming Superman, go to the police! What you don't need is the very agency that is supposed to have protected you in the first place volunteering to pony up funds for a private legal defense of your mistake which should have been avoided in the first place. Instead FINRA should be financing groups of young and hungry lawyers capable of actual snooping, investigating and discovering.

Maybe it's not as easy to catch the bad guys as we think. Perhaps it's much easier to prosecute them after the fact -- we've never done either, so who are we to say? But we know there are plenty of firms out there willing to take on your case on spec. Why do they need help?

Don't believe us? Then apparently you've never visited YouHaveALawyer.com and searched for "Schwab YieldPlus Fund."