The Investors’ Control of Their Investment Advisers. Who Has the Final Word?

TAMAR FRANKEL

BU Law emerita professor Tamar Frankel discusses an emerging issue affecting financial advisers—when a client may exercise control over the actions of the adviser. Frankel relates the story of an investment adviser that did not follow the client’s orders to cease certain investments, at a cost of almost $5 million to the client. As Frankel explains, the Securities and Exchange Commission (SEC) got involved, resulting in the investment adviser’s settlement for a significant payment to the client and other conditions.

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Sea-Land Services, Inc. v. DOWCP, et al.

Docket: 18-60698

Opinion Date: February 14, 2020

Judge: Jerry E. Smith

Areas of Law: Admiralty & Maritime Law, Government & Administrative Law, Personal Injury

Clarence Ceasar, Jr. injured his neck and back while working as a longshoreman for Sea-Land Services, Inc. in 1997. Because of those injuries, Ceasar was unable to work and had to undergo several medical procedures. Thirteen years later, Ceasar and Sea-Land reached a settlement, under which Ceasar received a lump sum instead of continuing disability payments. Sea-Land remained on the hook for Ceasar’s ongoing medical expenses. Ceasar was cleared to return to longshoreman duties in 2010 with no restrictions, despite chronic neck and lower back pain. Ceasar started working for Universal Maritime Service Company ("UMS") and was injured again a year later when a coworker lowered a cargo container onto his hands. Sea-Land petitioned the Fifth Circuit Court of Appeals for review of an order of the Benefits Review Board (“BRB”) which upheld the determination of an administrative law judge (“ALJ”) that Ceasar did not aggravate his 1997 injury at Sea-Land while working for UMS in 2011. After review, the Fifth Circuit determined the BRB did not err, denying Sea-Land's petition.

Roy v. City of Monroe

Docket: 18-31063

Opinion Date: February 14, 2020

Judge: E. Grady Jolly

Areas of Law: Civil Rights, Constitutional Law, Criminal Law

Clarence Roy, a Christian street preacher, was issued a summons outside a nightclub in Monroe, Louisiana, after a woman accused him of following her and making inflammatory remarks. The summons, which was issued by Sergeant James Booth of the Monroe Police Department, cleared the way for formal charges under the city of Monroe’s “disturbing the peace” ordinance. Roy was tried and ultimately acquitted by a municipal court judge. Shortly thereafter, he filed suit pursuant to 42 U.S.C. 1983, in which he argued Booth and the city deprived him of numerous constitutional rights under the First, Fourth, and Fourteenth Amendments. Two district court judges denied relief, first in part and then in whole, respectively. Finding no reversible error, the Fifth Circuit Court of Appeals affirmed.

United States v. Mecham

Docket: 19-40319

Opinion Date: February 14, 2020

Judge: Costa

Areas of Law: Constitutional Law, Criminal Law

Defendant-appellant Clifford Mecham took his computer to a technician for repairs. The technician discovered thousands of images showing nude bodies of adults with faces of children superimposed. The technician reported the pornography to the Corpus Christi Police Department. Unlike virtual pornography, this “morphed” child pornography used an image of a real child. Like virtual pornography, however, no child actually engaged in sexually explicit conduct. The Fifth Circuit Court of Appeals determined the circuits disagreed about whether morphed child pornography was protected speech. The Fifth Circuit agreed with the majority view that morphed child pornography did not enjoy First Amendment protection, so it affirmed defendant's conviction for possessing child pornography. "But the fact that the pornography was created without involving a child in a sex act does mean that a sentencing enhancement for images that display sadistic or masochistic conduct does not apply," so defendant's case was remanded for resentencing.