The University of Miami School of Law’s Investor Rights Clinic is starting the year with a significant boost to its mission. In January, the clinic received a $97,282 Cy Pres distribution stemming from the class action settlement in In Re: Robinhood Outage Litigation, a consolidated case in the Northern District of California that affected customers nationwide.
The litigation followed a series of system outages in March 2020. Most notably, a day-long outage on March 2, 2020, prevented investors from accessing their accounts or transacting in securities during a period of high market volatility, resulting in substantial losses.
What is a Cy Pres award?
Class counsel eventually secured a $9 million settlement. After the majority was distributed to class members, approximately $200,000 remained—an amount insufficient to cover the administrative costs of another round of individual distributions. In such cases, the court may authorize a Cy Pres award, which requires that remaining funds go to a nonprofit whose interests align with the original class. The court agreed that the IRC’s mission—assisting harmed investors with claims too small to attract private legal representation—mirrored the interests of the Robinhood plaintiffs.
The award was made possible through the advocacy of Kaplan Fox & Kilsheimer LLP, who represented the class plaintiffs. Courtney Werning and the law firm of Meyer Wilson Werning, long-time supporters of the clinic, also played a pivotal role in securing the funds.
“We are honored to receive the Cy Pres award in this significant case which will assist the law school in providing continued funding to the clinic, which was launched in 2012 after receiving a limited grant from the FINRA Foundation,” said Melanie Cherdack, the clinic’s associate director.
Providing Students Experience in Investor Protection
The IRC, one of nine clinics offered at the School of Law, is staffed by second and third-year law students. Since its inception, the clinic has recovered over $1.5 million for clients. Beyond individual representation, law student interns conduct financial outreach, meet with FINRA regulators, draft comment letters on SEC and FINRA rule proposals, and have helped expand victim recovery funds in Florida.
Lara Weiss, 2L and student fellow at Clinic says the “Investor Rights Clinic has been one of the most meaningful parts of my law school experience, giving me the chance to work directly with and advocate for real clients.” Another student, Jackson Gillespie, 3L who traveled with the clinic to Washington, DC to meet with securities regulators stated, “the opportunity to meet with FINRA gave us insight into all of the work that it does in investor protection—including investigations, data analytics, and enforcement actions—and we walked away with a better understanding of how best to represent the Clinic’s clients.”
“It’s encouraging to see this tremendous support for the investor protection mission of the clinic,” said Scott Eichhorn, director of the clinic. “The funds will go directly toward helping students gain more experience in client representation and advocacy for the investing public.”
Read more about Miami Law’s clinics.
