The company said that while it believes dispute resolution is best handled via arbitration, it has chosen to remove the waiver until the issue is resolved by the appropriate regulatory and/or court decisions.

Schwab decided to be proactive because the arbitration decision will likely take considerable time to resolve and may leave clients with a degree of uncertainty until the legal and regulatory process is completed.

Last year, the Financial Industry Regulatory Authority, Inc. (FINRA) brought charges against Schwab, claiming the company’s arbitration agreement violated its rules that ensure customers can join a class-action case instead of arbitration. However, in February, a FINRA hearing panel ruled in Schwab’s favor.

The National Adjudicatory Council (NAC), FINRA’s internal appeals board, received an appeal by FINRA to the Schwab decision, and the case is pending.

Consumer activist group Public Citizen took credit for Schwab’s actions. The group, which is pushing for an end to mandatory arbitration agreements for customers, claimed that Schwab bowed to public pressure created by a petition drive Public Citizen instigated recently.

A. Heath Abshure, Arkansas securities commissioner and president of the North American Securities Administrators Association Inc., says Schwab’s modifications look like a PR move because the company is putting the class-action waivers on hold rather than eliminating them.

Securities regulators are prodding the Securities and Exchange Commission (SEC) to end or reform the use of mandatory arbitration clause, using the authority granted by the Dodd-Frank financial law.

Scott Ilgenfritz — president of the Public Investors Arbitration Bar Association, which represents plaintiffs’ attorneys — claims that the Schwab move is a positive development for Schwab’s customers and the investing public.

The next development related to the Schwab decision is expected to be the result of the appeal by FINRA to the NAC. That hearing is set to begin in September.

Several organizations, including the PIABA, AARP and NASAA have supported FINRA’s appeal by filing amicus briefs with the NAC. In fact State securities regulators recently asked the SEC to overturn the FINRA hearing panel’s decision.

Scott Starr, securities attorney at Starr Austen & Miller endorses the Schwab decision allowing clients to file class-action suits.  “This is definitely a big step in the right direction to act in the best interests of the investors instead of their brokerage house advisors,” he said. “Let’s hope that all good firms follow suit.”

In meetings with more than 40 lawmakers, about 17 members of the North American Securities Administrators Association Inc. (NASAA) made the case that investors should be allowed to go to court to settle grievances against their brokers.

SEC Commissioner Luis Aguilar favors such regulation. In a statement, Mr. Aguilar expressed the belief that allowing investors to take their legal claims to court would enhance investor protection and strengthen federal securities laws.

With authority granted by the Dodd-Frank financial reform law, the SEC may prohibit or curtail compulsory arbitration for clients of brokers, as well as investment advisers. However, the SEC has not yet addressed the arbitration provision.

NASAA spokesman Bob Webster said it’s now time for the commission to act under Dodd-Frank to protect the investing public and prevent the further abuse of forced arbitration contracts.

Earlier this year, controversy over compulsory arbitration flared up when a Financial Industry Regulatory Authority, Inc. (FINRA) hearing panel ruled that the regulator could not stop Charles Schwab Corp. from using the arbitration agreements to prohibit clients from engaging in class actions.

But state regulators and others are still pushing for better investor protection through eliminating or restricting mandatory arbitration. A. Heath Abshure, Arkansas securities commissioner and NASAA president, said that arbitration has increasingly become the sole forum available to an aggrieved investor. He argues that investor protection means ensuring appropriate civil remedies for investors.

Will the SEC propose arbitration reform? At least three of the five commissioners need to support such a proposal.

SEC commissioner Elisse Walter told reporters that she would support taking another look at the question. She added that for investors, arbitration presents some significant advantages over court litigation.

Arbitration backers claim the process is more efficient and less costly than a court proceeding. But opponents argue that class actions provide a better venue than arbitration for disputes involving small amounts of money.

Mr. Aguilar argues that investors should not be forced to give up their access to judicial redress. Scott Starr, securities attorney at Starr Austen & Miller agrees. “The securities arbitration system is slanted to assist the brokerage industry, and this is the reason the industry has fought so hard to maintain it,” he says. Mr Starr adds, “Securities arbitration should be optional — not mandatory — so that the defrauded investor and his attorney have the option of a real judge conducting a trial.”

Source: Article “SEC commissioner: Mandatory arbitration must go,” by Mark Schoeff Jr., in Investment News.

IF YOU ARE A PATIENT OF THE WAGONER MEDICAL CENTER AND HAVE SUFFERED INJURY OR SICKNESS AS A RESULT OF DRUG TOXICITY, OR A LOVED ONE HAS DIED OF AN OVERDOSE, PLEASE CONTACT US.

Beginning next week, DuPont will begin notifying all plaintiffs who lost their trees to the herbicide Imprelis that a settlement has been reached in the federal class action lawsuit against the major chemical manufacturer.

Starr Austen & Miller LLP filed a class action lawsuit against DuPont in the summer of 2011.

A corporation that owns a number of golf courses in central Indiana informed the law firm that several hundred trees had died as a result of Imprelis being applied to the golf courses.

Plaintiffs across the U.S. also filed lawsuits against DuPont claiming that Imprelis had killed thousands of trees. These cases were consolidated in federal court in Philadelphia.

Last month, the court gave preliminary approval to a fair settlement that had been negotiated with DuPont. Although the chemical manufacturer will begin notifying plaintiffs of a settlement next week, monetary payments won’t be made until September when a final approval hearing will take place.

Two golf courses, Coyote Crossing and Battle Ground Golf Club, lost trees to Imprelis, but settled directly with DuPont . Battle Ground reportedly received nearly $500,000 and Coyote Crossing is still negotiating its settlement.

The amount of money each golf course will receive depends on the size of the trees. Some trees at Coyote Crossing and Battle Ground were worth $10,000. But whether or not the plaintiffs decide to replace the trees, they just want to move on to the next tee.

Source: http://www.wlfi.com/dpp/news/local/plaintiffs-in-herbicide-lawsuit-could-find-out-more-about-a-settlement-next-week

The SEC revealed that their recent examinations unearthed custody-related problems in one third of the firms reviewed. Advisers failed to recognize that they control their clients’ assets, co-mingled client, proprietary and employee assets and fell short of surprise-exam requirements.

Advisers cited by the SEC had to change their custody compliance policies and procedures, modify their business practices or devote more resources to custody issues.
SEC Chairman Elisse Walter notes that because safeguarding assets is central to investor protection, investment advisers need to follow SEC rules when they maintain custody of their clients’ funds.

Most investment advisers prudently house their clients’ assets with a third-party custodian such as Charles Schwab & Co. or TD Ameritrade Inc. In contrast, the $65 billion Ponzi scheme perpetrated by Bernard Madoff represents a questionable way to handle clients’ funds. Madoff’s firm maintained custody of his clients’ money.

The lawyers at Starr Austen & Miller LLP handle cases involving securities arbitration, misrepresentation, overconcentration, broker fraud, negligence, broker churning, breach of trust and malpractice.

Source: Article “SEC Warns Investors that Advisers Could be Mishandling Assets,” by Mark Schoeff Jr., in Investment News.

In 2012, an Oregon jury awarded several million dollars to the family of a man who was killed by a commercial motor vehicle. The verdict in the Linhart v. Heyl Logistics case is significant because it was entered against a transportation broker for negligent hiring, and it included punitive damages.

Industry insiders believe this is the first verdict in the country awarding punitive damages against a transportation broker for negligent hiring. It is one of the latest cases placing liability on a transportation broker for an accident involving a motor carrier with whom it has contracted.

However, trucking brokers need not think that an overhaul of their company policies is necessary to protect themselves from negligent hiring. This is because brokers will not get caught in the negligent hiring trap if they use due diligence when hiring motor carriers.

To illustrate a lack of due diligence, the broker in the Linhart case hired a motor coach carrier without checking into whether the carrier had insurance or other financial responsibility under Federal Motor Carrier Safety Regulations (FMCSR) Part 387. In addition, the carrier did not have Department of Transportation (DOT) operating authority, and the carrier’s operating authority had been revoked previously when the principals were business owners of a now-defunct motor carrier.

In fact, a truck driver for the carrier in the Linhart case was just ending a crystal methamphetamine high and falling asleep at the wheel when he struck Linhart.

Brokers have a duty to the motoring public to ensure that the motor carriers they hire have the basic qualifications required by the FMCSR.This includes keeping a complete file on each motor carrier they hire in order to establish that the broker cares about the quality of the motor carrier it is hiring.

With expertise in handling wrongful death cases, a truck accident attorney or any of the other attorneys at Starr Austen & Miller, LLC is available to help individuals involved in car, truck or semi-truck accidents.

Source: Article, “Linhart Verdict Reaffirms Imperative for Due Diligence in Selecting Motor Carriers,” by Joseph W. Pappalardo and Jeffrey D, Stupp, in Tort Source, a publication of the Tort Trial and Insurance Practice Section of the American Bar Association.

According to the panel, the language used in Schwab’s customer agreements to prohibit participation in judicial class actions violates FINRA’s rules. However, FINRA may not enforce those rules because they are in conflict with the Federal Arbitration Act.

This ruling means brokerage firms can potentially use arbitration agreements like Schwab’s to prohibit customers from participating in class action cases, thereby insulating themselves from liability.

The panel found that Schwab violated FINRA’s rules by attempting to limit the ability of arbitrators to consolidate individual claims in arbitration. The panel also fined Schwab $500,000, and ordered the firm to remove the offending language from its arbitration agreements and notify customers.

FINRA does not allow class-action claims to be filed in its arbitration system, so precluding customers from pursuing class claims in court effectively kills them.

Responding to FINRA’s ruling, Andrew Miller, FINRA arbitration attorney at Starr Austen & Miller LLP, said “This is a terrible result for the average investor. It effectively insulates broker-dealers from liability for small-value claims that can only effectively be addressed as a class action. The average investor doesn’t have the financial resources to take on broker-dealers for a claim that has a small individual value. Because FINRA does not allow class-action claims to be arbitrated, preventing investors from filing class claims in court effectively kills them.”

Source: Investment News article by Dan Jamieson

The victims are among the millions of Americans whose stock portfolios and mutual funds tanked during the recent financial crisis. These investors are now searching for ways to realize better returns than what’s being offered by bank deposits and government bonds. Many of the alternate products promise higher returns and are ostensibly immune to stock market volatility.

Promoted by aggressive investment advisers, these new investments are taking the form of speculative bets – such as private loans to startup companies and shares in bundles of commercial real estate properties.

Brokers are eager to sell these speculative investments because they often bring in higher commissions than standard mutual funds and stocks.
But a large number of these investments have proved disastrous.

Cases of potential broker misconduct have been mounting in the offices of regulators, and stiff penalties for fraud are being imposed. For example, one of the nation’s largest brokerage firms, LPL Financial, was ordered to pay $2.5 million for improperly selling real estate bundles to hundreds of investors in Massachusetts.

The practice of investors moving money in pursuit of higher interest rates — known as chasing yield — is reverberating throughout the economy.

Behind the statistics are real people whose losses are palpable. Take the case of a business consultant and her husband, whose sizable IRA began to lose value. The couple moved $470,000 to a new, risky investment recommended by their broker who promised “a modest annual interest rate of 7 percent.”

The couple soon stopped receiving interest payments, the venture went bankrupt, and the couple lost their money.

The team of investment fraud lawyers at Starr Austen & Miller, LLP handles cases involving securities arbitration, misrepresentation, over-concentration, broker fraud, negligence, broker churning, breach of trust, and malpractice.

Source: Article, “Speculative Bets Prove Risky as Savers Chase Payoff,” by Nathaniel Popper, in NYTimes.com.

The May 2012 jury verdict in the ChatmanWilson v. Cabral case illustrates the hefty penalties being handed down.  A Texas jury awarded 37-year-old Vanice Chatman-Wilson several million dollars against Coca-Cola.  Chatman-Wilson’s vehicle was struck by a Coca-Cola company station wagon driven by Araceli Vanessa Cabral who was on a business call on her hands-free cell phone – allowed by company policy.

Not only did Chatman Wilson suffer a spinal injury, but she required back surgery and was assigned 25 percent disability.

Unfortunately, disracted driving accidents are becoming rather commonplace. A 2010 National Highway Traffic Safety Administration study states that in 2009, 5,474 people were killed on U.S. roadways and about an 448,000 more were injured in motor vehicle crashes attributed to distracted driving. Approximately one in five deaths was linked directly to cell
phone use.

The dangers of cell phone use are not limited to the manipulation of a handheld device. Studies show that both hands-free and handheld cell phone use creates a 37 percent increase in cognitive distraction.

In fact, a 2006 study from the University of Utah statistically supports the premise that cell phone use is as dangerous as driving while intoxicated.

This brings us back to the Chatman Wilson v. Cabral verdict. Simply because CocaCola – or any other company for that matter – has a hands-free phone policy does not make it immune from liability.

Speaking to the dangers of using a cell phone while driving, Andrew Miller, truck accident attorney at Starr Austen & Miller, LLP in Logansport, Ind., says, “Companies have to recognize the danger their employees pose to the public when trying to simultaneously drive and carry on a cell phone conversation. Study after study has shown the danger of distracted driving due to cell phone use of any kind handheld or hands-free.  Companies not only need a policy prohibiting their employees from using cell phones while driving, but also need to enforce those policies.”

Source: “Cell Phone Restrictions: Exploring Liability for Inadequate Company Policies,” by Jeremy P. Taylor and Keith S. Rivers, in Tort Source, a publication of the Tort Trial and
Insurance Practice Section of the American Bar Association.

The recent uptick of distracted driving lawsuits and hefty jury verdicts provides a lesson for
companies: have a clear cell phone use policy in place and consider banning all cell phone use by
employees using company vehicles.
The May 2012 jury verdict in the ChatmanWilson
v. Cabral case illustrates the hefty penalties being
handed down. A Texas jury awarded 37yearold
Vanice ChatmanWilson
$21.5 million
against CocaCola.
ChatmanWilson’s
vehicle was struck by a CocaCola
company station
wagon driven by Araceli Vanessa Cabral who was on a business call on her handsfree
cell
phone – allowed by company policy.
Not only did ChatmanWilson
suffer a spinal injury, but she required back surgery and was
assigned 25 percent disability.
Unfortunatlely, disracted driving accidents are becoming rather commonplace. A 2010
National Highway Traffic Safety Administration study states that in 2009, 5,474 people were
killed on U.S. roadways and about an 448,000 more were injured in motor vehicle crashes
attributed to distracted driving. Approximately one in five deaths was linked directly to cell
phone use.

A transfer case is found on all-wheel-drive vehicles. It connects to the transmission and the axles. The transmission sends power to the transfer case which transfers the power to the axles.

The National Highway Traffic Safety Administration (NHTSA) received complaints on October 14, 2012 and January 10, 2013. The October 14 complaint noted strange noises preceding a loud bang, sudden stop and smoke. A local fire department responded and found metal parts on the road. The January 10 complaint reports that a local dealer indicates that the transfer case is a known defect and should be recalled.

Edmunds.com’s Town Hall Talk message board also notes the problem.

Reference: http://townhall-talk.edmunds.com/direct/view/.F187f6b

  **Messages # 490 and 491 refer to a cracked transfer case and possible fire hazard (similar accounts of a loud noise followed by smoke, while the vehicle is unable to be driven).

We are currently seeking more information about the cause of these issues. If anyone has any information about the Mazda CX-9 transfer case issue or has experienced a similar problem as referenced here, please contact us.