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At the Round Table with Corporate Finance and Securities Valuation Expert, Dr. Elliot Fishman

October 13, 2023

In this episode . . .

Our guest, Dr. Elliot Fishman, is a corporate finance and securities valuation expert. As a former finance professor and partner of a private equity fund, he offers discerning opinions reflecting a unique combination of financial theory and customary industry practice. He’s worked on very big cases starting with a derivative to the $83 billion Madoff securities fraud. He recounts how he was brought in to review an earlier expert witness report on the Madoff-related case, stating, “I put on my college professor’s hat and found some issues with how the report was read. I suggested a different way of looking at it.” He elaborates, “ . . . even though they [previous experts] came from big firms, they could not look at it the same way I was able to as both a college professor and having practiced on the street portfolio. Economics is not merely an accounting exercise. It is not merely a corporate finance exercise. You need to understand how the securities are issued, to whom they are issued, and how they are issued to apply the appropriate discounts.”

Other topics include preparation, staying current in your field of expertise, when to say “no” to a case and how to present yourself as an expert in the best manner. When asked for any advice to new experts, he states, “Yes, something comes to mind with that question and that is to persevere . . . You are going to have many setbacks and many detractors early on in your career, and you are going to get passed over for many assignments where you think you are qualified. Keep your name out there, do good work, and do some pro bono work. If it gets your name in circulation, it is all worthwhile.”

Episode Transcript:

Note:  Transcript has been lightly edited for clarity.

Host:  Noah Bolmer, Round Table Group

Guest: Dr. Elliot Fishman, CEO at Astrina Inc.

Noah Bolmer: Welcome to Discussions at the Round Table. I am your host, Noah Bolmer, and I am excited to welcome Dr. Elliot Fishman. He is the Founder and CEO of Astrina, Inc., a litigation support firm specializing in securities valuation. He is a sought-after expert, a Ph.D. economist, and a published author. He holds multiple advanced degrees, including a Wharton MBA and a Ph.D. from the University of Pennsylvania. Dr. Fishman, thank you for joining me here today.

Dr. Elliot Fishman: My pleasure. Thanks for inviting me.

Noah Bolmer: Let’s jump into it. You have decades of experience as an expert witness for the financial sector, primarily. Tell me about Astrina, and how you first became an expert witness.

Dr. Elliot Fishman: The caveat is the financial services and intellectual property sector. It is a securities valuation and intellectual property valuation patterns, copyrights, trademarks, warrants, derivatives, etc. How did I get into the field? Well, it was kind of by accident. After my Wall Street career, I was a college professor at New York University Stern School of Business and Stevens Institute of Technology. During that seven-year stint as a college professor, I was asked by a colleague, a friend of a friend from a major law firm, now Law 50 firm, who was doing some analysis on a derivative of the Madoff fraud case. It was the largest securities fraud case in United States history, and they had hired some experts from the big firms. This is a derivative of the Madoff-related case. It was the reallocation of proceeds after the bankruptcy hearing, and this attorney and their economist friend were not happy with the result. Their so-called experts were providing for them, even though they came from big firms, they could not look at it the same way I was able to as both a college professor and having practiced on the street portfolio. Economics is not merely an accounting exercise. It is not merely a corporate finance exercise. You need to understand how the securities are issued, to whom they are issued, and how they are issued to apply the appropriate discounts. To make a long story short, I stumbled into it and was asked to look at someone’s report. I put on my college professor’s hat and found some issues with how the report was read. I suggested a different way of looking at it. Before I knew it, I had been asked to replace the big firm that had been consulting on the case for many hundreds of hours, and I wound up writing my independent expert report and testifying in that position on the case.

Noah Bolmer: On your first engagement were you testifying?

Dr. Elliot Fishman: On my first engagement. I had no idea about the field, but I was told by counsel, after the fact, that I was pretty good at it. I should consider it as a new career. I was a college professor, and I stumbled into it.

Noah Bolmer: That is interesting. So, you went into it and hit the ground running. How was the preparation that first time out? Did you feel prepared and ready to be an expert witness for such a big case?

Dr. Elliot Fishman: Preparation is a double-edged sword. One of the qualities I have learned over the years of being an expert witness is not to put the hats on as an expert witness, not to jump out there as a hired gun, and think you know everything. If you are qualified for a case, you show up, apply your trade, run your numbers, and do good work as if writing a paper for a published journal. You present yourself authentically. There was nothing wrong with preparing, or I was asked a series of questions, and I applied my learning.

Noah Bolmer: That is interesting. I have heard many stories about people who felt they could have used more preparation, like some mock cross-examination for someone who has never been in a courtroom, in the hot seat, what goes into a report, or how to answer questions, where does my expertise begin? Many attorneys advise their experts not to answer anything other than what is asked and not give any extra information, but it sounds like you are ready. You did not need much coaching. Is that right?

Dr. Elliot Fishman: Attorneys always try to coach. It is in their blood. They want their case to unwind and answers to go on the record in order, but it all sounds scripted. One has to have their wits about them and not make contradictory remarks about the statement. Anything ambiguous can be torn apart on cross-examination. I think the goal of an expert is to be authentic and not to practice out of his trade. If I do not know the answer, I will say I do not know. That is perfectly acceptable in a deposition or courtroom. It engenders the authenticity of this testimony, and that is ultimately what the judge and jury are looking for. That is also what unsettles the other side. When the expert is not trying to know everything or pretends to know everything, I mean, gosh, 20% of the time in a deposition, I will concede the other side is right in every case. Perfect. Sure. Why not? An expert is not advocating his client’s position. This is important for new experts and maybe new attorneys to understand. We have an ethical obligation and the rules of Civil Procedure. We have a professional obligation to be objective and put an engagement letter in my retainer letter so I may obtain findings that are helpful to your client, neutral to your client, and, or even hurtful to your client. The expert is objective, and his ultimate responsibility is to the court, not to their client.

Noah Bolmer: Let’s unpack some of that. I want to back up to being an expert in the first place. What does that mean in your industry? But also more broadly, what does it mean to be an expert and expert enough to be able to take cases and generally have enough knowledge to be able to properly represent the facts of the case. Do you ever find yourself at the last minute, needing to brush up on something or learning something new because you are in a venue that you have not been to before or anything like that?

Dr. Elliot Fishman: One should be learning throughout one’s whole career and brushing up on what they do monthly when a case is presented. It allows them to relearn literature. I should not be learning literature fresh. That is not a good case for me. Fortunately, I have taught finance at major universities. I have taught finance at the graduate level, including some complex topics. Much of the stuff out there I have seen before in academic literature and practicing on Wall Street as a private equity manager, as a venture capitalist, as a restructuring as an [M&A] guy.

Noah Bolmer: Do you recommend attending conferences, speaking at conferences, or continuing education?

Dr. Elliot Fishman: About 10 years ago, I decided that I would never attend a conference unless I was going to speak or be on the panel. I am not trying to be conceited. It is a time sink, and it is a double-edged sword to collect many business cards and meet people because I have trouble not staying in touch with my existing network, and it is disrespectful to meet, make new professional acquaintances, and not follow up in a meaningful manner. Conferences are where I go to brush up. I will give some CPUs, and I will take the EU, but the various professional societies. They will ask me if I give a course to offer people CPUs.

Noah Bolmer: Is that because of your unique position, not unique, but because of your position of having taught this subject often and also having been doing this for a long time? In other words, what would you recommend to a newer expert to maintain their expertise and to continue to grow if they do not have quite the storied career that you do Doctor Fish?

Dr. Elliot Fishman: Now, I am blushing. This is an audio interview, and you cannot see me blush. I do not know if I have a storied career, but I have a long career and have worked hard over the years. I think younger experts do their work. They have to get their credentials. If they do not have a Ph.D. and get other letters after their name, there are enough professional certifications, whether a CFA or any CPA designation. Conferences are helpful, but career networking is going on. I find them to be intellectually light. I would recommend a younger expert for one of the letters after the names. I say that demonstrates substantive expertise. I will tell you MBA and CPA are light credentials, so I do not need to be offensive to anybody who is listening to that and is a practicing expert with an MBA. In a deposition, you got torn apart. The NBA Finance curriculum is not deep enough to answer many of these questions of Complex Securities cases. You need a Ph.D. background or many years on Wall Street to know the securities trade and how they should be evaluated.

Noah Bolmer: Do you think it is important to have an expertise niche, so something not just finance, but something specific within finance that maybe there are not quite as many experts?

Dr. Elliot Fishman: Yes and no. Everybody wants a person who knows the ins and outs of convertible bonds and has only done that instrument their whole career. That limits your opportunity. I do not know how many of those cases are filed per year. You do not want to limit yourself. I would not branch out too far beyond the area of your academic training or your work training.

Noah Bolmer: You mentioned ethics and how you are bound to tell the objective truth. You are not bound to represent the attorney or the case but to tell the truth. Have you often run up against ethics issues during cases? Have you been in a position where you have not accepted a potential engagement that otherwise would have been lucrative because of ethics issues?

Dr. Elliot Fishman: I have turned down assignments because I was not sure about either the credibility of the client or the legitimacy of their case. I never want to be in a compromised position, personally or professionally, where I am helping an attorney argue something that I do not sincerely believe in not entirely evident at the beginning of a case until I go through the deposition files, read all the paperwork, and the interrogatories about who is on base and who is pushing the envelope from the onset. I would never take on a case where I do not feel good about the client or the legitimacy of the claim.

Noah Bolmer: Has it ever happened to you during a case where you have taken an engagement and then it turns out that either the attorney is trying to put words in your mouth or get you to talk about something in a specific manner that you are not comfortable with? Have you ever had to walk out on a case?

Dr. Elliot Fishman: I have never walked out on a case, but I have pushed back on counsel hard sometimes. They have hired me again, even after I take the script. They respect professional independence, and it worked out.

Noah Bolmer: Do you find that a proactive approach is best for a newer expert that you should be pushing back on what you are on, what the attorney is trying to quote, unquote, to coach you to do or say?

Dr. Elliot Fishman: Ultimately, you must live with yourself. Clients will come and go, but if you are compromising your ethics early on in your career, that is not a good path to go down. You will always have that voice in the back of your mind. No, I do not want that voice in my head.  Young people starting out should keep that in mind.

Noah Bolmer: Have you been subject to any amount of oppositional research or trying to impeach the witness? Have they ever come at you with things like he is not an expert, or he is not the right person for this, and tried to tear you down from the other side? And how do you deal with situations?

Dr. Elliot Fishman: It is their challenges, which have always prevailed over everyone. Has somebody Googled me or [doxed] me and tried to come up with stuff that might embarrass me on the stand? I mean, have at it. It is part of the credentials. Is that the public record unimpeachable? I think that is something for younger experts to bear in mind too. Be careful what you say and post. Your positions can and will be held against you, 10, 20, or 30 years later. The internet has a perfect memory.

Noah Bolmer: That is something that has changed. I have heard stories about digging up an old paper that somebody had forgotten. There are people with 60, 70 or 80-year careers, and you might not remember what you wrote 50 years ago on a topic. Opposing counsel will pull something out and say, didn’t you say X,Y and Z? So, is that a situation you have dealt with?

Dr. Elliot Fishman: It has never been an issue because first of all, most litigation is just a game. The other side is trying to come up with anything and everything they can, even if they are just juggling synonyms. I had one recently say, “I was not an expert in full absorption accounting because it was not in my expert report.” There are two different ways of looking at damages, so the opposing counsel tried to impeach my credentials because I had never published a paper in full absorption accounting. I had used some other term that was synonymous with it. You must understand that litigation is a game, and you must put your armor on and not take any of it personally. Always fall back on your credentials and what you have done. That gives you self-confidence. Stand up and present your case. That is all we can ask of you.

Noah Bolmer: Do you tend to know the experts on the other side? Are there people that you are familiar with that you run in the same circles with?

Dr. Elliot Fishman: I have seen some of the same names, time and time again. Cases that I have written expert reports on or those I have been asked to look at, so there are a handful of large firms that seem to use a handful of people. It is a small universe for the big cases. Experts that are best to find on the big cases. Do we know any of them personally? No. But do I know their work, their writing style, and their thinking style? Yeah, it comes up again and again. And I presume they know mine at this point.

Noah Bolmer: I was going to ask whether these cases affect interpersonal relationships among not your co-workers, and among people who are in the same build, but I guess if you do not know them personally, then there is not a whole lot of that going on.

Dr. Elliot Fishman: Yeah, we are not running into each other at Starbucks but if we did, it would be cordial.

Noah Bolmer: Let’s pivot to winding up cases. There is something that I like to ask everybody, and I have heard wildly different opinions on this. Do you stay abreast of the case after your portion? Do you continue to monitor who wins the case? Is that important to you at all?

Dr. Elliot Fishman: During a case, I deliberately stay removed because I never want my testimony on the stand to be influenced, for example by the deposition or the testimony of the opposing expert. Unless counsel shows me a motion or a ruling that would be relevant to my expert report, I do not want to see it. This goes back to my whole ethic of maintaining absolute neutrality and objectivity, which gives me authenticity on the stand after the case is settled. Sure, I have a curiosity. I will e-mail the attorney. They will never give me a copy of the settlement. If it went to trial the transcripts and or the rulings are all on LexisNexis, and I will pull them up like everybody else.

Noah Bolmer: Is winnability a factor when you are deciding whether to accept the engagement, not just your expertise? Correct. Does it matter to you that you are on the quote-unquote correct side of the case that will probably prevail?

Dr. Elliot Fishman: It matters that I am on the ethical side of the case. That may be the losing side, but if the client is behaving ethically, I would not mind. I have no reservations about taking time for clients who win cases because they have a bigger war chest. They hire a big law firm for thousands of hours, will throw millions and millions of dollars, and overwhelm the other side. Winnability is a different word. I will take a case with veracity, which is not always winnable. It is nice to win, but that is not how I keep score.

Noah Bolmer: There are no hash marks. You would never be a public defendant, right? But yeah, that is interesting. I have met experts who have said one of their primary concerns is if they are going to win and they say that is how they get much of their business. Then I have had other responses that are more like yours where the veracity of the case is the important thing.

Dr. Elliot Fishman: Look, everyone believes they are right to hire an attorney and experts. They are not doing it frivolously.

Noah Bolmer: Without revealing anything that you cannot, do you have one or two interesting cases that you can talk about that have either informed or reinforced how you approach expert witnessing in general or changed your perspective in some way?

Dr. Elliot Fishman: I would have to talk about one that has settled. I cannot talk about the ones I am presently working on. There was a big one in the Delaware Chancery Court that involved registration rights that a private equity firm was not entitled to. They floated public securities on a stock or floated securities, which are not supposed to be publicly tradable. I got a real deep dive into corporate security law and registration rights. And of course, I had come from Wall Street, so I knew how to trade those instruments and I knew how to float them. I knew how they should be priced, but the valuation was the tip of the iceberg for that.

Noah Bolmer: What? No. Go on. Go on.

Dr. Elliot Fishman: Ask me the question again and I will give you a more precise answer.

Noah Bolmer: Oh, sure. I was going to ask if you had any big takeaways from it. If it changed anything fundamentally about the way you perceive cases or your overall perspective.

Dr. Elliot Fishman: I think that one goes back to what I mentioned a few minutes ago that the inability of the case does not always translate to the veracity of the case. In that case, the defendant had lawyered up with a team. The results of the settlement were confidential, but my client was right that it could have gone to trial, and we would have prevailed. I cannot disclose the figure, but it is in the hundreds of millions of dollars. But fine you have tens of millions of dollars to litigate it so that is a big takeaway, The big cases have turned into big money. You cannot expect to win a big case without a big war chest, It is interesting that this area of litigation finance is developing to buttress that and to give people with smaller pockets more rights.

Noah Bolmer: Absolutely. Speaking of financials, that is a good segue way into billing. People bill in many different ways. Do you prefer project-based or hourly billing? Do you take retainers? What do you think is the best way for an expert to bill?

Dr. Elliot Fishman: I am very traditional. I bill on an hourly basis. I do not bill every hour I work. I do not bill when I come up with a learning curve because that is not fair to the client. I will take a retainer upfront. The retainer covers everything up until the deposition phase. For me to become familiar with the case, do background research, and write the expert report, at that point, the fixed fee stops because I do not know what is going to be thrown at me after that. Whether I have to write a rebuttal to the other expert’s report. How long does deposition preparation take, or does the deposition go on? There it is an hourly basis, subject to a cap up until the deposition. Then the toll starts.

Noah Bolmer: Sure. What would you recommend to other newer experts?

Dr. Elliot Fishman: Going back to my core professional practice. It is the ethical way to go whether it is a large or small client, they want to know what they are in for. They do not want to get hit with a $100,000 bill right up front. What I would recommend to anyone in the field, whether they are starting, in mid-career, or have been doing it for decades is to cap your fees up to the deposition. Do not charge your clients for all the brushing up you must do.

Noah Bolmer: Before we wrap up, do you have any last advice that you’d like to give to experts or attorneys that are working with experts out there?

Dr. Elliot Fishman: Yes, something comes to mind with that question and that is to persevere. The expert witness game is a marathon. It is not a sprint. When I was on Wall Street, people right out of business school would fill up the first year or two or five years out. They would get involved with an IPO or a flashy hedge fund. Most careers are nothing like that. You are going to have many setbacks and many detractors early on in your career, and you are going to get passed over for many assignments where you think you are qualified. Keep your name out there, do good work, and do some pro bono work. If it gets your name in circulation, it is all worthwhile. Over time, people will hear about you, respect you, and will come to you. I do not think I have done any outbound marketing in the past five or six years. I do not need to. The brand and the word take many years to build.

Noah Bolmer: That is sage advice. Thank you, Dr. Fishman, for joining me today.

Dr. Elliot Fishman: It is my pleasure. Thanks for taking the time and allowing me to share.

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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 Corporate Finance and Securities Valuation Expert, Dr. Elliot Fishman

Dr. Elliot Fishman, Founder and CEO of Astrina, Inc.

Our guest, Dr. Elliot Fishman, is the founder and CEO of Astrina, Inc., an economist, and a sought-after expert witness. Dr. Fishman holds advanced degrees including an MBA from Wharton and a PhD from the University of Pennsylvania.