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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Gadelhak v. AT&T Services, Inc.

Court: US Court of Appeals for the Seventh Circuit

Docket: 19-1738

Opinion Date: February 19, 2020

Judge: Barrett

Areas of Law: Business Law, Communications Law

The Telephone Consumer Protection Act bars certain uses of an “automatic telephone dialing system,” which it defines as equipment with the capacity “to store or produce telephone numbers to be called, using a random or sequential number generator,” as well as the capacity to dial those numbers AT&T’s “Customer Rules Feedback Tool,” a device that sends surveys to customers who have interacted with AT&T’s customer service department, exclusively dials numbers stored in a customer database. AT&T sent unwanted automated text messages to Gadelhak. Gadelhak brought a putative class action under the Act, 47 U.S.C. 227(b)(1). The district court held and the Seventh Circuit affirmed that AT&T’s system did not qualify as an “automatic telephone dialing system.” While characterizing the Act as a grammatical nightmare, the court concluded that the phrase “using a random or sequential number generator” modifies both “store” and “produce.” AT&T’s system neither stores nor produces numbers using a random or sequential number generator.