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At the Round Table with Financial Expert, Terry Stroud

October 6, 2023

In this episode . . . 

Our guest, Terry Stroud, is one of the co-founders of Opportunity Group and serves as the Chief Executive Officer for the firm. In this episode, he highlights how preparation is the key to a successful engagement according. He states, “You’ve got to be prepared. Study your notes, study everything that the lawyers have given you, all pleadings, all depositions, every document.” A back-and-forth approach further aids in preparation.

Other topics include vetting engagements, staying current, and ethics as he explains, “I cannot determine the guilt or innocence of anyone. Here are the facts. The person who decides the innocence or guilt is the judge or the jury. Not me.”

Episode Transcript:

Note:  Transcript has been lightly edited for clarity.

Host:  Noah Bolmer, Round Table Group

Guest: Terry Stroud, Co-Founder and CTO at Opportunity Group

Noah Bolmer: Welcome to Discussions at the Round Table. I am your host, Noah Bolmer. I am excited to welcome Terry Stroud. Mr. Stroud is a Co-Founder and Chief Technical Officer of Opportunity Group, a full-service consulting and business advisory firm. He has decades of experience in finance, banking, and regulatory frameworks. Mr. Stroud holds an MBA from Stephen F. Austin State College. Mr. Stroud, thank you for joining me here today.

Terry Stroud: It is my pleasure, Noah. Thank you for inviting me.

Noah Bolmer: Let’s jump into it. You have a long career in finance, both in the public and private sector, tell me about your background and your business opportunity group.

Terry Stroud: My first job out of college was with the United States Treasury. I was a National Bank Examiner with the Controller of the Currency. People ask me what a bank examiner does. I tell them, “It is an auditor for the banks, except we look at the safety, soundness, and protection of the depositor’s deposits. I always wanted to be a banker. I grew up in a small town where the community banker wore a suit and tie and was well respected. So, I thought that I wanted to be a banker. This banker advised me and said, “If you want to learn banking, go be a bank examiner, and the best is the Controller of the Currency. I followed his advice and was a regulator for about 15 years. I was a commissioned examiner with two federal agencies, The Controller of the Currency and The Office of 5th Supervision. It was a career choice I have never regretted. I got exposed to both good and bad banks. I saw small and multinational banks. It has been a rewarding career.

Noah Bolmer: How did you start an opportunity group from that?

Terry Stroud: I started Opportunity Group after I left the United States Regulatory Agency, I did some work as a consultant with liquidating some insurance companies, but during this time I was asked by the International Monetary Fund, The World Bank, and other international donor agencies if I would consider going overseas. The assignment I had in Texas was for about two and a half to three years and I said, “I need to finish this assignment.” When it was over, I was offered some opportunities with the USA Department, and my first assignment was in Russia. It was scary for me. I had traveled some, but I was from a small town. I had never traveled to Europe, and especially the former Soviet Union, so it was scary for me. I finally accepted the invitations from the international donor community.

Noah Bolmer: That is quite the story. With such a broad and diverse background from your start in the banking world and then opening opportunity group. What does it mean to be an expert in your field? How do you maintain that level of expertise?

Terry Stroud: It is challenging. As you know, the financial markets change daily. There are new laws and new regulations, it takes a serious effort to keep updated on things so, I attend seminars. About 10 years ago, I became a Certified Fraud Examiner, which appealed to law firms for litigation support. Once I got that designation, I started getting more and more calls. When law firms or attorneys look at my background, they know if there is a banking issue and if it involves fraud, I am the person to take the account. Now, that does not mean I take every assignment. I am picky about that. I do not want to take an assignment where I put myself at risk and can be exposed. I have a saying, “Know your limits and stick to your area of expertise.” Do not try to go into a field you do not fully understand.

Noah Bolmer: That is an interesting point. Would you say that you turned down a significant number of engagements?

Terry Stroud: I take about 30% of those offered to me, provided the case has some substance to it. Let’s say it is a small fraud case and somebody lost their savings, or it involves a car loan or something like that. I do not take it. Most of my cases involve tens of millions of dollars in litigation, whether it is in the lending area, deflation, or some corporate governance issues with insider abuse. So, the case has to have substance, or I do not want to deal with it.

Noah Bolmer: When you talk about whether a potential case meets your particular expertise, let’s dig into that more. How do you evaluate it? Is it simple or do you have to get into the weeds on the case and learn more about it before that? As a follow-up, have you ever gotten into a case and later learned it was outside your area?

Terry Stroud: That is an interesting question. Let me return to your previous question because I did not answer it. I take about one-third of the cases after talking with the lawyer. I will decide if it does or does not suit me. I could do it from a technical aspect but if something about the case does not make sense, I do not take it then if I am not the expert that they need. Now, to go back to your current question, it is difficult when a lawyer pleads, and then you have the initial interview and decide whether you, the lawyer, or the law firm will hit it off from a personality aspect. The most difficult part is that the facts you look at do not always lead to the problems of the case. You do not get that until you start digging and get much of the information. So, when they let me give an example, I cannot give any names, but there was a case involving Wells Fargo. They thought the case involved illegal tying operations and a buy-a-tie operation. That means they sell a bank customer or a bank client one product, and then they can buy another. When we got into the meat, I started looking at things and said, “God, this is not what the case is about. Here is what you need to focus on.” The bank had a breakdown in its corporate governance systems and did not follow policies and procedures. As a result, we won the case and the plaintiff walked away with a substantial amount of money. You never know the case until you get into it.

Noah Bolmer: Going back to whether you take it in the first place you said during the case you might find out you did not know everything there is to know about it. Do you find yourself having to do any on-the-spot learning like, “I know ninety percent of what this case is about, but there is this area of law that has recently changed or something that I have not encountered that I must brush up on during this case?” Has that happened to you?

Terry Stroud: That happens all the time. As I said, laws and regulations change. Banking is a highly regulated industry now. While they may not come out with a new law or a new regulation, they will come out with the pronouncement that says, “These are our new standards and best practices.” That does not have the impact of a law or regulation, but banks are strongly urged to comply with them. There are changes all the time. So, you are constantly having to look at new information even if you know ninety percent of it. I have never had a case where I have not learned something new. Even if I thought, “I have done this a dozen times and I know everything there is to know about it.” No, you do not. Every case is unique because people are unique.

Noah Bolmer: How do you handle a situation where the new thing that you need to learn turns out to cut against your counsel’s case? Has it ever worked out to seem like you were going to be an expert who had everything on his side, but as everything unfolded, you were ethically required to say or do something that maybe was not the best thing for the case?

Terry Stroud: I have had that in a couple of cases. One of them was the highest profile case that I have had, based on my billing. I had to resign from the case. I said, “I cannot provide you with the direction that you need in this case because I do not think that is where this will end.” You must have a frank discussion with the lawyers and say, “I cannot support this. If you are looking for somebody to support your position, you must find somebody else because my conclusion is not leading. that way.” The attorneys are disappointed and unhappy, but I have never had a case where one has told me, “Mr. Stroud, you are wrong, and we are right.” They have said, “We appreciate your frank opinion, and we will consider it.” I have had to resign for a couple of cases over that.

Noah Bolmer: So, you have resigned a case in process rather than just rejecting it outright. That is interesting. Is that something that has happened with any frequency or a couple of times over the years?

Terry Stroud: No, just a couple of times, but again you never know the entire case until you get into it. I always tell the attorney that in our initial interview or shortly after we get the case, I say, “Look, we must be flexible. We are going to go where the facts take us. You may already have your ideas and your thoughts on where you see this going, but I am going to base my report and my findings on the facts. I cannot express my personal opinions as a certified thought examiner. I cannot determine the guilt or innocence of anyone. Here are the facts. The person who decides the innocence or guilt is the judge or the jury. Not me. Here are the facts.”

Noah Bolmer: Of course. Were you contacted out of the blue for your first engagement as an expert witness? Is it something that you were looking for?

Terry Stroud: My first case after I left the regulatory agencies was by a guy who used to be the owner of a bank where I was his regulator. He led a regulatory agency where you could not argue or take any case until you have been gone from the agency for 12 months, I had been gone from this institution for a couple of years and he had some regulatory concerns. I lived in the Dallas area, and he still had his business in the Dallas-Fort Worth area. We did not keep in contact, but he knew where I was located. He asked me if I would help. So that was my first taste in being an expert witness outside the regulatory agency. I helped him and eventually, the case was resolved to the satisfaction of both parties. That was my first involvement with somebody that I knew from being their primary regulator.

Noah Bolmer: When you first got started, did you feel prepared for your first cross-examinations or even writing reports? Was it made clear to you by the attorney what was expected of you and what to expect during the trial?

Terry Stroud: Writing reports, let me back up for just a second. During my career as a Federal Bank Examiner, I had to write an examination report after every examination that went back to the board of directors. It was addressed to the board of directors, and I had to make an informal presentation after the examination to senior management and a couple of the board members. Then, a month and a half later, when the report was processed, I had to go back to the bank and make a presentation. So, based on my career, I am comfortable writing examination reports. I have no problem telling people when there are issues. I have never had a problem saying, “You are going to have to change this” because that is the way I was trained. I am a professional skeptic. That is the way a federal examiner is trained. To trust but verify everything that you see. Everything you put in that report, you had better be able to prove that it was based on the information you were provided. I have never had a problem discussing findings. There is always a give and take when you have meetings like this, whether it is with the board or it is with a group of lawyers. I always tell the board. “If you are interested in fixing this problem or alleviating this concern, then I could be your best friend. If not, then we are not going to be friends.” Same thing with the lawyer. Most of them respect that.

Noah Bolmer: What sort of techniques have worked for you in terms of preparation? Your prior experience has led you to be the sort of person who is ideal for expert witnesses, but many of our listeners might be newer and not as confident. What techniques have you experienced when preparing for a case? What do you think works the best? For instance, do you do mock cross-examinations?

Terry Stroud: That is another excellent question. Preparation is key. You must study your notes with all pleadings, depositions, and documents the lawyers give you. Do not read them once, but several times because the last time you read something, you may find a small sentence you missed. When I finish a report, I give it to a lawyer friend with more than 30 years of experience. We used to work as federal regulators. I will edit it and he will give it back to me. I read his comments, then we have a video call just like you and I are having now. We go through his corrections, and I ask him to be the opposing counsel and throw these questions at me because what is happening today was not happening 18 to 24 months ago, all lawyers are now doing what they call a double challenge. They question your credentials. Are you qualified to do this? That is happening almost every time now. Five years ago, that hardly ever happened. So, you must make sure you know everything you put on paper. You need a second set of eyes to look at your report or somebody in your field to say, “Wait a minute. Have you thought about this perspective? This question could be misleading. Let’s go back and think about that.” I always have a second set of eyes to look at my document. Because of my background, it is somebody I have known for decades and who is not afraid to say. “Hey, Terry, you are wrong.” They challenge me, and that is good for me. Whatever challenge they give me when I am in a deposition or at a trial, you can bet the opposing counsel is going to come at me twice as hard as one of my peers or colleagues will.

Noah Bolmer: Of course, it is interesting to hear that you found that Daubert challenges have increased over the years. You have had a long career. Do you find somebody will pull up an article you wrote 30 years ago and try to impeach you from your entire body of work? How do you handle that kind of thing?

Terry Stroud: I got to keep my social posts to a minimum because some lawyers said, “Terry, do not put anything on social media that you are not ready to defend.” I do have some blocks that I put out on LinkedIn or my website, but I am careful about that because as you get older or as things progress what your opinion is today may not be what it was 10 years ago. I try to keep that at a minimum. I have had people ask me before I say, ‘Terry here was your thought on this. Has it changed?’ [This is] is an important deal to your audience. Do not be afraid to say, “My opinion has changed as facts change.” And, your opinions need to change because, in almost every case that I have been involved in, you will get a new set of facts that you did not have from the time your report was written to the deposition or trial. It could be many months and the lawyers say, “Here is a new piece of information.” I always put in my reports that my opinions and conclusions can change if I am given new information, I did not have at the time I prepared my report. 

Noah Bolmer: Do you?

Terry Stroud: Never put the . . .  I’m sorry, go ahead.

Noah Bolmer: No, no, go ahead.

Terry Stroud: Never put something in the definitive that does not leave you a way out. Again, let me repeat that. If the facts change, then your opinion changes, or if you get new information say, “My opinion may or may not change.”

Noah Bolmer: It is super important, and you are not the first person who said that. I have heard stories of people getting caught up in becoming too defensive over things they may not agree with anymore. They feel they need to agree with everything they have ever said. I think that it is important for attorneys to coach against that error.

Terry Stroud: I agree.

Noah Bolmer: One other thing I would like to ask you before we wind up. There are a couple of things that I like to ask every guest. One of those is, do you track a case after your part is done? Are you concerned with whether or not the action prevails?

Terry Stroud: Yes, I do. I always ask the attorney when the case is concluded. Most cases now settle out of court, but if it does go to court. I always ask them if they would be kind enough to let me know how the case is resolved. Most of them will. There are a few that will not, but you can usually find the results online because you have all the details. You know the case number, so you can find out if you want to, but I always ask the attorneys. Again, most of them say, “Sure, I will keep you informed.” I always want to know.

Noah Bolmer: Is winning itself important to you? Do you get business if you win more cases?

Terry Stroud: No. My integrity is the most important thing.

Noah Bolmer: Sure. When you are vetting a new client, does the winnability of the case play a part?

Terry Stroud: I do not want to sound naïve. Let me go back to the point I made earlier. The case presented in an initial meeting may not be exactly where it leads you, but here is the most important thing to me. Is it a case where I bring a perspective that counsel does not have? What do I know about this topic that the others do not? If I do, I want to take that knowledge to the forefront. I rarely think about whether I am on the winning or losing side until the end because sometimes, as I write the report, I will say, “This issue is not as clear as I would like.” Then I will get on the conference call with the lawyers and say, “This issue is still a bit cloudy. Can you give me additional insight into that?” But to answer your question, I do not think about winning or losing. I think about bringing my best judgment and opinions. I am going to give the best that I can give.

Noah Bolmer: One thing I ask everyone is about billing. Do you prefer project-based billing or hourly billing? Do you take a retainer?

Terry Stroud: I do hourly billing because I have had cases where the lawyers think, “Terry will resolve this.” There is one that I am working on now. They said, “This is two eighty-hour weeks.” Let’s say two years later, the case is still going on. That does not mean I have been great for two years, but we have gone beyond that eighty-hours. You never know where these cases are going to go. So, to answer your question, it must be by the hour, and I always ask for an upfront retainer. I have had a couple of law firms when your opinion was not exactly what they wanted to say, “We are going to move on.” That is too bad. I will not risk that.

Noah Bolmer: You should not. Do you have any last advice for newer expert witnesses and attorneys taking on expert witnesses before we sign off?

Terry Stroud: Do not be afraid to say, “I do not know.” If even if it is in a deposition, or at trial and a lawyer asks you something that is totally out of the blue that you did not have in your report because many of these questions are intentional. The lawyer wants to see if he can get you frustrated, so never be afraid to say, “Sir, I do not know. If you want an answer now, the answer is no, because I do not know.” You can say, “I was not asked to provide that opinion” because attorneys are masters at trying to get you off your game. Never be afraid to say no and never lose your calm. Never let them see that you are frustrated. They can continue to hammer on something, and you just say, “I was not asked to provide that opinion.” The attorneys will say, “You are not answering my question.” I will come back with, “I am answering your question. You do not like my answer.”

Noah Bolmer: Do you have any specific techniques to keep your cool when you are being grilled by an attorney like that.

Terry Stroud: Here is the way I think of it. I know this topic or this subject matter better than anybody else in this room, so I am going to stick to my convictions. I know this topic, but that does not mean I am always the person who knows the best, in my attitude or my mental outlook, I say I know this as well as anybody in the courtroom. I am going to stick to my conviction convictions.

Noah Bolmer: That is sage advice. Thank you, Mr. Stroud, for joining me today.

Terry Stroud: It was my pleasure. Thank you.

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After a quarter century helping litigators find the right expert witnesses, Round Table Group’s network contains some of the world’s greatest experts. On the Discussions at the Round Table podcast, we talk to some of them about what’s new in their field of study and their experience as expert witnesses.

At the Round Table with Financial Expert, Terry Stroud

Terry Stroud, Co-Founder and Chief Executive Officer, Opportunity Group

Terry Stroud, MBA is a Co-Founder and Chief Executive Officer at Opportunity Group, a full-service consulting and business advisory firm. Mr. Stroud has worked for the United States Treasury as a National Bank Examiner, and a financial consultant, and has decades of experience as an expert.