Vol.98. No. 2
EPSILON RHO TO CONVENE IN FLORIDA
M. TEPPER, Esq.
The Westin Ft. Lauderdale will host Tau Epsilon Rho's 78th Annual Convention.
The convention begins on Sunday, December 27, 1998, and runs through
Friday, January 1, 1999. The convention will feature an opening night
dinner and get-together on Sunday, December 27, and an Installation Dinner of
newly-elected officers on Wednesday, December 30. The convention will also
host the winter National Council Meeting and several Continuing Legal Education
programs. Of course, the convention will also feature our customary
nightly Hospitality Suite. Depending on interest, we may make a group
dinner reservation at a local restaurant for New Year's Eve (otherwise, you are
free to make your own plans for New Year's Eve). The Convention, dinners,
meetings, and programs are open to any member of T.E.R. in good standing (and
spouses, children, and guests, subject to certain exceptions). We have obtained a
fabulous room rate of $95.00 per night, single or double occupancy, and $85.00
per night for a second room; and these rates are available both before and after
the convention dates. The Convention fee is $325.00 per couple.
The Westin Ft; Lauderdale is a four-star luxury hotel set in a business park
approximately 15 minutes north of the Ft. Lauderdale/Hollywood International
Airport. It is conveniently located at the Cypress Creek exit off I-95.
Although the Westin is not a resort, it does feature a health club,
Olympic-size swimming pool, jogging trails, and paddle boating on a large lagoon
immediately adjacent to the hotel. The hotel is approximately 5 miles from
the Atlantic Ocean. The Westin also has arrangements with a nearby private
club for golf and tennis facilities.
For more information, please consult the Convention mailing you received in
October, or contact the Convention Chairman, David B. Liner, at 2100 Van Born
Road, Taylor, MI 48180; (313) 792-6237; email@example.com.
DAVID S. LEYTON, National
It's not an easy thing to write,
but it's true. I lost the Democratic primary election for the
Michigan House of Representative - by 552 votes. We worked from
April through primary election day, August 4; from sunrise past sunset
no days off. Therese and I gave up our summer; our annual trip to
Northern Michigan, backyard barbecues, lounging by the pool at our club,
golf, tennis...the list goes on and on. We knocked on doors until
our knuckles ached. We pounded yard signs until our hands were
blistered. We talked about my candidacy until we were hoarse.
In the end,.we came up short.
The emotional reaction to losing
an election is similar to the feeling you have when a no-cause verdict
is delivered (you can tell I'm a plaintiff's lawyer) in a very BIG case,
that you've worked on for years. Election Day is like waiting for
the jury to come back with its decision. In this case, the jury is
the electorate (those who show up to vote; voters turnout in my election
was only 15%). And the aftermath is reeling you feel drained, you
second-guess every decision you made and these feelings don't disappear
when the sun rises the morning after. It takes time; in our case, a
lot of time. Writing this column helps.
Did anything good come from losing
this election? Well, for one thing, I don't have to be on the same
ticket at Geoffrey Feiger, the Michigan democratic Party gubernatorial
nominee who, I predict, will lose overwhelmingly. Additionally, I
don't have to attend endless fundraisers, answer the media's never ending
questions, and knock doors in 40-degree weather. I'm back in my
law office, rebuilding my practice and cracking the whip on my partner
and support staff. And most importantly, I have time to spend with
Therese and the kids. In the end, it was not to be (at least at
Will I do it again? You need
I want to encourage all of you to
attend our annual convention Our Convention Planner, David Liner,
is renowned for finding wonderful spots where we can enjoy long-lasting
friendships and create new ones. TER is family and, even if you've
never attended a convention, I promise that when the convention ends,
you'll feel like part of the family.
A Publication of
Tau Epsilon Rho Law Society
BARRY L. LIPPITT,
Volume 98. No. 2 November 1998
Submissions, Correspondence, and Address Corrections to:
BARRY L. LIPPITT,
29777 Telegraph Road, Suite 2500
Southfield, MI 48034
(248) 357-0002 * Fax (248) 746-9746
Work on the T.E.R. website
continues, and it should be up and running by the convention. Check
it out at www.ter-law.org. In the meantime, if you'd like your email
address listed in the site member directory, send and email to bob
Bowytz at BowLawGrp@aol.com, and include your name, chapter, and email
address. You must be current in 1998 or exempt from dues to be
THE DIRECTOR'S DESK
ALAN M. TEPPER, National
The sun and surf of Ft.
Lauderdale, FL, eagerly awaits the arrival of the masses attending Tau
Epsilon Rho Law Society's 78th Annual National Convention, at the Westin
Ft. Lauderdale Hotel from December 27, 1998 through January 1, 1999.
What else can I say about the fabulous deal David Liner arranged
for us for this year's convention?! $95.00 per night for a double
or single room for the period between Christmas and New year's is a
phenomenal deal, and David deserves our profound gratitude for making
these arrangements, Full convention details have already been mailed to
the membership, and if you need additional details, call David
(313-792-6237) or me (609) 429-3901). We are expecting a great turnout,
and I look forward to seeing you in sunny Florida.
As National Executive Director of
TER, I am always being asked, "What does TER do for me?"
Obviously, because of our small size (in and of itself a benefit),
we cannot do for you what the larger bar associations and trade
associations do by way of benefits such as complex legal seminars
on varied topics of the law, discounts on car rentals, all types of
insurance, and the like. TER is a small, close knit group of
attorneys and judges who have bonded together more in friendship than
strictly for a professional reason. Personally, I belong, or have
belonged, to state and local bar associations in New Jersey and
Pennsylvania; I also belong to "trial lawyers" associations
such as the Philadelphia Trial Lawyers Association and ATLA-NJ, and the
benefits received from these organizations toward aiding my practice is
tremendous. However, TER is different.
As a result of my membership in
TER, which I joined several years ago while attending temple law
School, I have gone to numerous National Conventions, in Miami, Ft.
Lauderdale, Naples, Hutchinson Island, St. Pete's Beach, San Diego,
Jamaica, Freeport, Philadelphia, Chicago, Detroit, Nashville, Tucson and
Cleveland. In many of these cities I have met and become
friends with several local attorneys that I can truly call
good friends. I know that they can be relied upon to assist me with
a legal problem a client of mine experiences in that foreign jurisdiction.
And that relationship goes both
ways, so I will get that call about a problem a client is having in
New jersey or Philadelphia, and I am ready to help that TER member with
advice, or accept a referral of that matter, or direct him to
another attorney specializing inat area of the law.
How many of you can say that you
personally know attorneys throughout the United States that you can call
on a whim who would be willing to spend their time assisting you with a
legal problem pertaining to their local jurisdiction. That is what TER
is all about. Get active and meet members of TER from all over the
country. DO IT!! Attend this year's convention. Really learn what
TER is all about. See you in Florida in December.
We memorialized the following
members of T.E.R. at the Atlanta National Council Meeting:
Louis Berwitt, Cleveland; Alexander Betz (Past National Chancellor);
John Sklar, Detroit; Robert D. Abrahams, Hon. Paul Chalfin, Hon, J.
Sydney Hoffman, Hon. Edward Rosenwald, Philadelphia; Max W. Gibbs,
Broomall PA; Joseph Arthur Siegel, Toledo, OH.
By: JOEL H. KAUFMAN
31275 Northwestern Highway, Suite
Farmington Hills, Michigan 48334
(Ed. Note: This is the second part
of an article that began in the May 1998 issue. Citations and references
are available from the author.)
ARBITRATION AWARD AND APPEAL
In theory, arbitrators are
supposed to apply the same substantive measure of damages that would be
used by a judge in state or federal court. In practice however,
arbitrators apply "rough justice" on perceived equities.
Arbitrators do not have to follow or even know the law. Often,
arbitration fairness depends almost entirely on which arbitrators hear
Arbitrators are not required to
disclose or explain the reasons underlying an award. Arbitrators
generally do not spell out the reason for their rulings in writing.
Judicial Review of Arbitration
Awards is extremely limited and almost impossible to vacate. A party
must show corruption, fraud, bias or where arbitrators exhibited
manifest disregard of law in making an award or where the award is
arbitrary and capricious. Appeals are almost never successful.
A few weeks after a hearing concludes
the arbitrators generally issue their binding, written
decision, usually a summary of the parties' contentions and a few
sentences stating only the amount of the award and how much the parties
owe and hearing session fees.
All Monetary awards must be paid
within 30 days of receipt of award.
The NASD offers an informal,
voluntary process that employs an impartial person *the mediator) to
facilitate negotiations between disputing parties. The mediation is
non-binding ane no settlement is imposed upon the parties. The Mediator
is to help the parties more clearly define and understand the issues and
each side's interest.
Mediation can run separately from
and/or concurrently with the arbitration case. Each party signs a
Mediation Submission Agreement.
The parties submit a Mediation
Summary to familiarize the mediator with the dispute and their interest.
Once a Settlement Agreement is signed, it is final and binding on the
parties and no party can bring any action in court or arbitration.
The mediation fee schedule for a
customer dispute is $150.00 per party. In addition, the charge for the
mediators' time is $600.00 to be shared equally between the parties.
Additional mediation sessions are at the rate of $150.00 per hour.
Any dispute involving a dollar
amount not exceeding $10,000.00 must be arbitrated under Simplified
Arbitration Rules. A hearing is optional (at customer's request) and the
dispute is decided on the basis of a written Statement of Claim and
Exhibits. N There is a single public arbitrator who decides the claim.
The customer pays a non-refundable filing fee and hearing session
deposit as set forth in prior schedule.
First and foremost a securities
broker is a salesperson who earns a living by fenerating commission
through the purchase and sale of securities. The stockbroker makes his
money based on how much and how often their customers buy and sell, not
how well their customers do. In addition, a broker is an investment
counselor who give advice. Generally, an investor sues both the
individual broker and the brokerage company which supervises the
activity of the broker.
Three (3) of the most common types
of investment related misconduct resulting in customer lawsuits in
arbitration proceedings against security brokers and their brokerage
firm employers are excessive trading or "churning," unsuitable
trading, and unauthorized trading. Such conduct is plead as a unique
legal theory, but the same facts violate both federal and state statutes
and common law and are incorporated into other causes of action.
Churning is excessive trading in light of the size and character of the
account. Arbitrators consider the nature of the account and the
customer's investment objectives, whether broker exercised control over
the account, and whether the broker acted with willful or reckless
disregard to the customer's best interest.
INVESTMENTS. Broker has a duty to recommend only those
transactions which are consistent with the customer's financial
situation, needs and investment experience and objectives, The broker
must make reasonable efforts to obtain information concerning the
customer's financial status, the customer's tax status, the customer's
investment objectives, and such other information used or considered to
be reasonable in recommending a transaction.
TRADING. Trading without consent or authorization.
STOCK BROKER CLAIMS. Legal theories in the Statement of
Claim may include: Breach of Contract, Negligence (Stockbroker
Malpractice), Violation of the Michigan Consumer Protection act, Breach
of Fiduciary Duty, Intentional Infliction of Emotional Distress, Common
Law Fraud, Federal and State Security Law Violations of the Anti-Fraud
SEC Rule 10(B)(5) and Michigan blue Sky Law, MCLA 451.501 et seq.,
violation of rules of the National Securities Exchange, etc.
1. Inherent risks in stock market
investments. Losses are due to legitimate market influences.
2. Ratification. (The customer
expressly consented, approved, participated in and ratified the acts
3. Opinion vs. Fact: Sales
"puffing," i.e., statements of opinion such as shares prices
at $8.00 will be worth $25.00 in a year are statements of opinion and
generally not a basis for a claim unless a guarantee
or promise. Difficult to sue for
bad advice (For example: broker advised client to buy and stock went
down, advised client to sell and stock went up, etc.).
OUT OF POCKET COSTS.
Generally, a customer may recover "Portfolio Damages" which
is damage to the value of the account caused by the broker's
mismanagement. Out of pocket losses are calculated by comparing the
value of the account before, and after the broker's misconduct. Look to
the difference between the value of the investment at the time of
purchase and the current value, the projected sum the investor would
have earned had the account been properly invested, lost interest,
Under Michigan Law, attorney fees
are recoverable under the Michigan Uniform Securities Act. A person who
offers or sells securities in violation of the Michigan Uniform
Securities Act is liable for reasonable attorney fees. MCLA 451.810
Further, a person who suffers a
loss as a result of a violation of the Michigan Consumer Protection Act,
MCLA 445.901 et seq., may recover reasonable attorney fees. See MCLA
445.911 (2). Violation of the Act may not be willful to recover attorney
fees. Temborius vs. Slatkin, 157 Mich App 587 (1986).
Punitive Damages. See Mastrobuono
vs. Shearson, Lehman, Hutton, Inc. 514 U.S. 52 (1995). Generally,
punitive damages are awarded where the broker's conduct is
reprehensible, fraudulent, or in blatant violation of law or policy or
involves acts or omission that evidence reckless or callas disregard or
indifference to a customer's rights.
Rescission (in appropriate circumstances) involves returning an improper
investment to the brokerage firm in exchange for its purchase price, is
a particularly appropriate form of damages in cases of unauthorized
trading where the securities are still in the customer's account.
AND LOST INTEREST. (i.e., the amount of commissions and
other costs incurred as a result of the broker's misconduct) may be
(Joel H. Kaufman is in private
practice in Farmington Hills, MI, specializing in Securities-related and
other business litigation. He is a Past National Chancellor of the
Society. Questions may be addressed to him at firstname.lastname@example.org. A copy
of Arbitration Guidelines is also available.)
We are still looking for some CLE
presenters for the National Convention. If you are interested, please
contact the Convention Chairman, David B. Liner, at: Phone: (313)
792-6237; or Email: email@example.com.
Highlights of the Atlanta National
Council Meeting held in July:
Congratulations to Todd M. Berk,
Philadelphia, appointed by the Council to the vacant office of
Chancellor-Elect. You can read Todd at: 260 S. Broad St., Ste. 1410,
Philadelphia, PA 19102; (215) 731-1213; Fax (215) 731-1217; firstname.lastname@example.org.
Proposed revisions of the National
Constitution and by-laws were referred to a committee chaired by Barry
L. Lippitt, Detroit, for final revision and reporting to the next
national Council Meeting.
The Detroit Graduate Chapter has
continued to revitalize itself, recently holding a dinner featuring
member Prof. Robert A. Sedler, Wayne State University School of Law
speaking on "The Constitution and Impeachment." Prof. Sedler
is a constitutional scholar of national renown. We also continued our
ongoing breakfast seriesm "Uncensored and Unplugged," with
separate programs featuring Hon. Edward Sosnick, Oakland County (MI)
Circuit Court Judge, and Hon. Arthur Tarnow, U.S.D.C. 0 E.D. Mich., the
most recent appointee to the local federal bench. In November, we are
sponsoring lawyer/author Brad Meltzer, author of The Tenth Justice and
the recently-released Dead Even at the Detroit Jewish Community
Center's Annual Jewish Book Fair. We are also in the middle of a
recruiting drive for new membership.
Congratulations to member and
former U.S. Senator Howard M. Metzenbaum. In May, the U.S. Courthouse in
Public Square was renamed the Howard M. Metzenbaum U.S. Courthouse in
BARRY L. LIPPITT, National Editor
IF I WERE KING (OR AT
LEAST A HIGHLY PAID PUBLIC OFFICIAL)
Writing on election eve, I have been considering
the assault on our senses and tender feelings represented by the season's
political ads. As most (vocal) critics decry the mean-spiritedness and
non-relevance of most of these offerings, I have been looking for a solution,
and think I have found one.
As our political structure now admires the
creation of independent political fiefdoms, rather than creation of new
cabinet-level offices (suggesting to me at least that solutions for the
represented problems cannot be reached by consensus, but require autocratic,
unilateral action), I propose the office of Elections Czar, and present myself
as candidate, with the following platform:
No "negative" ads. The First
Amendment obviously was not intended to protect non-constructive invective.
All candidates must fund campaigns out of
their own pockets, and all campaign expenses must be paid C.O.D. No credit.
Candidates who refuse to participate in
open (albeit moderated) debate without prior submission of questions will
not be allowed to take office (of course, they can continue to run at their
own expense and run their mouths; they just won't be allowed to win the
Any office that does not generate a
contested election (at least 2 candidates) will go unfilled. No unchallenged
candidate could be that good.
No staged scenes for discussion of
candidates and issues in TV and radio spots. Discussing the merits of
candidates and their backgrounds while fishing would only scare the fish
away. And neighbors don't come over to was dishes and badmouth candidates.
No candidate may describe themselves as
"incumbent," if the voting populace doesn't know they're the
incumbent, they haven't been doing their job very well.
Any personal question posed by the media
must first be answered by the media member posing the question (with
Judicial candidates may not solicit
campaign contributions from lawyers who practice before them. Or, perhaps
better, allow the solicitation, but restrict the cap for lawyers to $5.00
per contested seat. And publish the list of contributions.
Resolution of personal attacks on a
candidate or a candidate's family will be resolved through use of the code
No billboards. Has everyone forgotten
Finally, no congressional oversight of my
actions. After all, if I have to spend time explaining myself to them, I
won't have time to do my job.