In Defense of Myself
As it turns out, I am still in the heart of Des Moines, biding my time thanks to the opposition in this case deciding that they wanted to spend extra time taking me apart piece by piece. I arrived here on Sunday with the initial expectation that I would give my testimony on Monday or Tuesday. As we began on Monday, it became clear that I was more likely to go on for my testimony on Tuesday or Wednesday. After a full day of watching the opposition slow-play play the primary fact witness, the broker who is at the heart of the financial issue for which my side is bringing suit, I said it might not be that I would give testimony until Wednesday. As Tuesday came and went, that particular fact witness remained on the stand and I made a bet with the other expert on our side of the case, a gentleman who spent 30+ years as a regulator at the SEC, as to when I might possibly get on the stand. He bet the over, and I bet the under as to whether or not I would at least get on the stand before the end of the day. He won. After the opposition dragged out their cross examination of this broker, who’s attorney spent several hours in redirect questioning, that came to an end in mid-morning today and since I knew I was the next one up, I thought there was a good chance. I would be able to finish up my testimony today. But suddenly, the arbitration panel decided that they had questions for that fact witness. It was actually quite logical that they would have more than a normal list of questions for him since this case is all about the decisions he made and the manner in which he conducted the investment program.
There are three arbitrators on our panel, which is the normal configuration. I don’t know what the criteria are for selecting panel members for this sort of arbitration, but from what I can tell, all it requires is someone who once received a law degree and is a full-fledged member of the bar. I say that this way because there certainly seems to be no age limits for being a panel member. The chairman of our panel is a woman from Oklahoma City who is probably in her mid-70s. One of the other members who is probably the most plugged-in of the three is a fellow in his mid to late 40s who comes from Kansas. The third member of the panel is an older gentleman who is perhaps in his mid-80s who is also from Kansas. When I say that the third panel number is an older gentleman what I’m really saying is that he is barely ambulatory and needs frequent rest breaks, as well as lots and lots of careful explanation to keep him up with the proceedings. I don’t want to be an agist, but it is not clear to me that this third panel member is competent to be on this panel. Judging by his questions, he is having a good deal of trouble catching on to the intricacies of the financial issues. On the one hand, that could work in our favor if he finds that the investment strategy being used is impossible to understand, and therefore would generally not be suitable for individual consumption. On the other hand, listening patiently to his questions is getting harder and harder and it is beginning to seem like he may have lost the thread. The 40 something gentleman is a professor of law, and I can tell from his questions that he thoroughly understands what’s going on in this case, but it’s also generally unappreciative of brokers who act fast and loose with investors. So while I have questions about where the older gentleman will come down on these issues, and gaining confidence that the younger gentleman is likely to side with us in finding that the broker didn’t do everything that he should have to protect the clients, it’s not clear how this panel will adjudicate this case. But it’s fair to think that none of the panel members can be ignored as to which way they’re leaning. So that leaves the chairman of the panel, the woman from Oklahoma, and until today she has not said enough for me to determine which way she leans. But when it was time for the panel to ask questions of the broker, she decided to walk us through with great tedium, trade by trade, and client by client, each transaction done by the group of claimants over the two year trading cycle.
One of the obvious secrets of these cases is to not say anything at any time to offend, or trouble the panel members. What’s the point of saying something that only makes them less predisposed in your direction. During the drawn out tedium, the chairman was inflicting upon us today it was a challenge not to make inadvertent noises if even only under my breath, to display my irritation with the drawn out process. I could see no purpose in reading through the detail of the trading pattern, which was all captured in a three page historical trend document. But she wanted to go through them, and to get the broker to agree that such and such was what she was reading on the paper. It wasn’t until the end of this long recitation that looked like it was going in the direction of suggesting the clients had gotten a taste for the trading activity, due to early gains, that she finally showed her hand. What became very clear was that she felt the clients were being lured into deep water that they had no business being in by the broker. She then went on to say that any suggestion that the clients were wealthy enough to absorb the loss (something that the broker had suggested over and over in his testimony), would’ve proven moot, if the trading had gone on for another month, because the losses would have mounted to the point where their entire net worth would’ve been at risk. This was a unique and effective way of counteracting the excuse that wealthy clients like these do not need protection and it served our purposes extremely well. I am still not sure why the tedium was necessary, but I’m happy to suffer it based on the outcome of where she finally got with her diatribe.
After all three panel members had asked their questions, which ranged from the sublime to the ridiculous, the opposing side tried to suggest that they would like a third bite of the apple and to re-re-cross examine the broker. Clearly what they were trying to do was to strike, while the iron was hot, and refute some of the notions which the panel had created for themselves from their questions. Our lead attorney objected to this, and the chairperson of the panel sustained the objection and turned down the request. That was perhaps the one moment when I garnered some hope that I might get on and off the stand during today’s business day.
I finally got on the stand after lunch so I had five hours to get my part of this case started and done. I thought I had a chance. My attorney spent a lot of time going through my qualifications as an expert, why my expertise applied so well to this case, and a review of my prominent opinions on the case. My attorneys wanted very much for me to show some passion for my views. They wanted my testimony to be memorable, especially because they now understood that this would only be concluded six months from now, and they felt that a memorable witness might be the only thing that stood out with the panel. The good news is it doesn’t take much to animate me on the topic like the misshandling of an investment program by a broker dealer. My 45 year history in the business of Wall Street has taught me that almost anything you can imagine a broker doing wrong, he probably has done wrong. So, I waxed eloquence on the risks inherent in this investment strategy, and on the lack of confidence in the manner in which the program was conducted. Furthermore, I pointed out that the firm did not comport itself well in terms of its supervisory and compliance oversight. Broker dealers are notoriously bad in general at complying with the rules and regulations regarding client protection, and this case was no exception. That’s my way of saying that the strength of my passion and my opinions was very genuine and didn’t need to be pumped up.
The last stage of the day was the cross examination of me by the opposition. They had two hours to do their worst, and they used all of that time to try and attack my background, doing their best to make the case that I was not either expert enough or reputable enough to have my opinion carry meaningful weight. This is a normal part of the deposition and testimony process for expert witnesses. I feel very good about my résumé, and very good about the degree to which it fits with this particular case, so I am not in the least bit intimidated by the opposition and I spent two hours smiling and answering his questions calmly. After several years of doing this business, I am very comfortable defending myself, but now I have to extend my flight home to later in the day tomorrow so that the opposition counsel can get another few hours to attack my competence to render an opinion. C’est la guerre.