The Clients’ Waiver of Their Rights Under Regulation BI of the Securities and Exchange Commission

TAMAR FRANKEL

BU Law emerita professor Tamar Frankel discusses the Securities and Exchange Commission (SEC)’s Regulation Best Interest (BI), which imposes on broker-dealers a commitment to act in the best interests of their clients. Specifically, Frankel addresses the SEC’s treatment of client waivers of the Regulation BI, which goes even further than general fiduciary law to prohibit any waiver of the broker-dealer’s conflicting interests.

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In the Matter of the Estate of Julisa Matute

Court: Supreme Court of Mississippi

Citation: 2018-CA-01772-SCT

Opinion Date: February 20, 2020

Judge: Griffis

Areas of Law: Health Law, Personal Injury, Trusts & Estates

Sixteen-year old Julisa Matute, along with her sister and father, were involved in a motor-vehicle accident in Harrison County, Mississippi. Julisa was transported to Mobile, Alabama, and was admitted to University of South Alabama Medical Center, a hospital operated by University of South Alabama (USA). Julisa died there intestate. Julisa’s mother and sister executed an authorization for the donation of Julisa’s organs with the Alabama Organ Center (AOC). An estate was opened; Julisa’s mother was appointed administratrix of the Estate. Shortly thereafter notice was served to creditors, USA probated a claim against the Estate for medical expenses. The Estate filed a “complaint to contest illegal probated claim and compulsory counterclaim,” alleging that before Julisa’s death, USA representatives approached Julisa’s family and asked that they donate her organs and, in turn, Julisa’s hospital bill incurred at USA would be “totally wiped out and not be collected.” As a result of this alleged agreement, the Estate contested USA’s probated claim and asserted that the “probated claim [wa]s null and void and uncollectable.” In a counterclaim, the Estate alleged emotional distress, fraud, and punitive damages because, according to the Estate, “[t]he hospital told [Julisa’s family] that the bill would be wiped clean for allowing them to have [Julisa’s] organs . . . .” A wrongful-death lawsuit related to the motor-vehicle accident was filed then by the Estate. A settlement was reached among the parties in September 2018. Months later, a hearing was held on USA’s contested probated claim. The chancellor entered a judgment approving the Estate’s Petition to Receive First and Final Accounting, Discharge Administratrix and Close Estate. USA filed a motion to alter or amend the order granting the Estate’s Petition to Approve Settlement of Claims of Wrongful Death Beneficiaries of Julisa, and asserted that the chancellor’s reference to a “hospital lien claim” was erroneous. The chancellor denied the motion. USA timely appealed. The Mississippi Supreme Court determined that while the chancellor properly denied USA's probated claim as uncollectable, the chancellor erred in finding the probated claim was invalid and erroneously ruled on USA's hospital-lien claim. As a result, the chancery court's judgment was affirmed in part, reversed in part, and remanded for further proceedings.

In re Guardianship of L.N.

Court: New Hampshire Supreme Court

Docket: 2018-0701

Opinion Date: February 19, 2020

Judge: Gary E. Hicks

Areas of Law: Civil Procedure, Health Law, Trusts & Estates

Respondent L.N. appealed a circuit court order denying a motion to authorize removal of life support filed by her guardian. In 2018, tests indicated that L.N. had suffered a stroke. L.N. was 69 years old at the time of the orders on appeal, and had “enjoyed a full, active, independent life” prior to her stroke on September 12. Thereafter, L.N. remained in the hospital on a ventilator to assist with breathing and a nasal-gastric tube for nutrition and hydration. L.N.’s attorney informed the court in a motion for expedited hearing that “[a]fter consulting with personnel, it has been indicated that [L.N.] will probably not survive the massive stroke which precipitated this hospitalization, but there is no one with authority to act.” There was no evidence that L.N. had previously executed either a living will or a durable power of attorney for healthcare. M.C., a former co-worker, was ultimately appointed as guardian. Based upon conversations, the guardian’s sense was that L.N. “would want to be allowed to have a natural death.” Notwithstanding testimony by L.N.’s caregivers and guardian, the trial court concluded that, “in cases of doubt, the Court must assume that the patient would choose to defend life” and did “not find that [L.N.] - under the facts in this case - would choose to have life support removed and a natural death process to occur.” On appeal, L.N. argues that the probate court erred in determining that “it had jurisdiction to make a determination as to the appropriateness, or lack thereof, of the removal of life support in the case of a patient who was in a persistent vegetative state” where “no party challeng[ed] the proposed removal.” She further argued that, even if the court had the authority to exercise its discretion in this matter, its findings were unsupported by the testimony. The New Hampshire Supreme Court reversed the order denying authority to remove life support and vacated, in part, the order appointing the guardian: “Because any limitation on the guardian’s RSA 464-A:25, I(d) authority after the October 17 hearing was not supported by the statutorily-required finding that it was “desirable for the best interests of [L.N.],” RSA 464-A:25, II, we vacate that limitation. Without that limitation, the guardianship order’s grant of the 'right and authority to determine if refusal should be made or consent should be given to any medical or other professional care, counseling, treatment, or service’ constitutes a general grant of authority that includes the authority to withdraw life-sustaining treatment in appropriate circumstances.”