Marisa N. DeMato, a partner at Labaton Sucharow in New York, is a recognized securities litigator with a focus on advising and representing public and multi-employer pension plans. She is also a leading advocate for diversity in the legal, financial, and political fields.
The daughter of a recently retired nurse and a retired police detective, DeMato has a natural interest in safeguarding pension plans for retired employees. Even when a stint on reality television suddenly opened many different career doors for her, she stayed dedicated to her work protecting the rights of pension plans and other institutional investors.
DeMato was part of the team that handled the closely-watched investor litigation stemming from the sexual harassment scandals at Fox News. She represented Seattle City Employees’ Retirement System in the case, which culminated in a $90M settlement and the ground-breaking corporate governance reform that was instituted at the company to better safeguard against harassment and other misconduct.
DeMato co-chairs an annual event that Labaton hosts through the firm’s Women’s Initiative program entitled “Institutional Investing in Women and Minority-Led Investment Firms.” The event, now in its third year, features an all-female platform and was shortlisted for Euromoney’s Best Gender Diversity Initiative award and for a Chambers USA Diversity & Inclusion award. She is also an active member of the Democratic Attorneys General Association’s Women’s Initiative, which seeks to break down barriers for women running for political office.
Lawdragon: The nation is slowly coming out of lockdown. Has this been a busy time for you?
Marisa DeMato: Definitely. We’re still getting appointed lead counsel and representing our pension plan clients in securities actions during this pandemic. I’m one of the partners who works closely with the firm’s pension plan clients, and this crisis has demonstrated how resilient these plans are. They’ve continued to do the important work that needs to be done in order to keep their pension plans moving forward. We’re on multiple Zooms a week – discussing the issues we’re seeing in the market, trends we’re tracking, and the merits of currently filed securities actions. And I’m regularly attending virtual board meetings to assist our clients with any issues they may have during this turbulent time.
LD: You’ve spoken a lot about the 2008 financial crisis and how that affected the pension plan community. Is it too early to tell if we’re going to see something similar coming out of this pandemic? Are people sounding alarms?
MD: Thankfully, no one has hit a panic button, so to speak. I think many institutional investors learned valuable lessons from the 2008 financial crisis, so their response to the COVID-19 crisis has been a bit more measured. Our pension plan clients are being very cautious, of course, but they’re also doing a fantastic job of effectively communicating with plan beneficiaries. These plans are also well-equipped to navigate the current market conditions as they work closely with fiduciary counsel, consultants, and investment managers, so they’re continuously furnished with valuable advice to help make decisions.
In terms of whether we will see something similar to the 2008 financial crisis, I believe it’s still too early to tell. Right now, we’re monitoring the market — and paying close attention to a few sectors, so we’ll continue to keep our fingers on the pulse of market trends.
LD: Do you foresee a lot of fraud suits coming out of this? In 2008, it was like the veil was lifted, and we were seeing all these systemic difficulties or pain points. Do you think we’re in a similar moment now?
MD: That’s a great question, especially because 2008 exposed so many weaknesses in the system. More than ten years later everyone understands what led us to the 2008 financial crisis — the role of the various market players, the big banks, and a relaxed regulatory environment, which made the market collapse possible. Whether the Covid-19 crisis will pull the curtain back and expose fraud in the financial markets in the way the 2008 crisis did, still remains to be seen.
That said, I certainly believe if certain sectors continue to experience market downturn then this may reveal fraud and other financial manipulations by companies. One of the key implications of Covid-19 on securities litigation that we’re focused on is addressing institutional investors’ concerns about identifying fraud in response to recent market volatility. This is an understandable concern, since Covid-19 has been disruptive to many business sectors and continues to create uncertainty within the financial markets. We’ve been focusing on monitoring companies that may have been hiding improprieties behind the bull market and may be capitalizing on market downturn to issue delayed disclosures or move problems off their balance sheets. The continued market volatility may expose fraud in the coming months.
LD: We’re all watching and waiting for now.
MD: Yes, investors are watching and waiting, but we’re also monitoring the market for our clients.
LD: Can we talk a bit about the incredible work you did for the Seattle Retirement System in their case against Fox News?
MD: We represented Seattle City Employees’ Retirement System (“SCERS”) and served as additional counsel in the Twenty-First Century Fox action. Labaton worked closely with lead counsel in this historic action, which stemmed from widely-reported sexual harassment scandals at Fox News. The allegations collectively described a pervasive and long-running culture of sexual misconduct, discrimination, and workplace retaliation at the company. The allegations also included that Fox had made tens of millions of dollars in payments to settle sexual harassment allegations over the course of nearly twenty years.
In response to these public allegations, SCERS joined the City of Monroe Employees Retirement System (lead plaintiff) and other Fox shareholders in asserting their statutory right of inspection of Fox’s books and records in order to investigate potential wrongdoing by the Fox board of directors and certain Fox executives. As more facts came to light, the company agreed to engage with SCERS and other Fox shareholders about adopting meaningful corporate governance reforms. This settlement was significant for a few reasons. First, as a woman, I felt a personal connection to this litigation because this was an area that was developing in response to the #MeToo movement. Then, as a lawyer, it’s one of the cases that I’m most proud of because of the significant corporate governance reforms that were achieved as a part of the settlement.
LD: It was really groundbreaking, wasn’t it? That isn’t a common response to wrongdoing like this, or at least it wasn’t, to set up a new internal structure in this case, the Workplace Professionalism and Inclusion Council.
MD: It was extremely groundbreaking. And we believed it was necessary to finally change the toxic corporate culture at Fox News. These corporate reforms could also serve as a model for other corporations seeking to improve their governance and oversight functions, especially since Fox was not the only company in the news during this time. We witnessed a number of securities and shareholder related actions filed in 2017 and 2018 in response to the #MeToo movement.
LD: It’s so encouraging every time we see real systemic reforms. Backing up a bit now, how did you get into securities law in the first place? And with a focus on pensions?
MD: Actually, I went to law school to become an environmental lawyer, but after I graduated in 2004, I was given a great opportunity to join a nationally recognized firm that represented institutional investors in shareholder class actions. At the time, I knew very little about securities litigation, so I was a little nervous to walk away from my dream of becoming the next Erin Brockovich (with a law degree, of course).
What initially drew me to this practice were the clients. In this new role, I would get to represent teachers, firefighters, police officers, healthcare workers, municipal workers, and labor trade workers in high-stakes litigation against some of the largest publicly traded companies in the U.S. As the daughter of a law enforcement officer and a nurse, I felt an immediate connection to these clients. And I understood the importance of safeguarding the retirements of these employees. It was a natural fit for me.
LD: It’s such important work. Especially with this current market instability, you want to make sure you have smart people protecting those pensions.
MD: This work has been so important to me. The most rewarding aspect of my practice has been working closely with these pension plan clients, especially in the wake of the Covid-19 crisis. So many of the great men and women that I’ve had the privilege to work with for many years are now the frontline responders and true American heroes.
LD: They really are. So, your mom was a nurse and your dad was a detective — where did you grow up?
MD: I was born and raised in New York. Then, when I was 13, my entire family — not just my mom, dad, sister, and brother but my entire family (aunts, uncles, cousins, and grandparents) — moved from Long Island, New York to South Florida. I also spent over four years in Washington, DC, and then I moved back to Florida for a few years after graduating from law school. Then, in 2009, I made the decision to move back to NY.
LD: When did you first think about becoming a lawyer?
MD: I knew I wanted to be a lawyer from the time I was in the third grade. My grandmother had an amazing influence on my life and introduced me to politics at a very young age. By the fifth grade, I was telling people that I wanted to be a congresswoman when I grew up. My grandmother encouraged me to pursue a degree in political science, and that’s exactly what I did. During my college years, I was very politically active. I served as the congressional intern for Congressman Robert Wexler (FL 19th District) from 1998-2000, which was an exciting and eye-opening experience. Congressman Wexler served on the U.S. House Judiciary Committee during the Clinton impeachment, so I was exposed to many aspects of the political process right out of the gate.
During law school, I served as a legal intern for the Attorney General of Maryland (Jospeh Curran), and I worked directly with the Counsel to the Maryland General Assembly. I was always fascinated by the interplay between politics and the law, so I was drawn to certain areas of the law that might one day lead to a career in politics. After graduating law school, I completely changed course when I accepted a position at a law firm. I think everyone was surprised by my decision.
LD: What then led you to Labaton?
MD: First and foremost, I was drawn to Labaton’s successful track record and the firm’s impressive legal team. Beyond that, one of the primary reasons I was excited to join Labaton was the firm’s Women’s Initiative program. In the first ten years of my career, I was looking for a law firm culture that would provide female mentors and programs that were focused on cultivating female attorneys and fostering our growth and leadership. Once I learned about the work Labaton was doing with their Women’s Initiative program, I knew it was the right firm for me. I recognized that the firm’s core belief system was aligned with mine — and I could tell they were truly committed to the issue of diversity.
Within my first year at Labaton I knew I had made the right choice. The firm truly values the ideas of all attorneys and encourages collaboration. The culture at Labaton has enabled me to spread my wings as an attorney. From day one, my ideas were incorporated into the discussion — and this was very important to me. And then I turned those ideas into action, which has led to many great experiences. I also appreciate working with a firm that is not afraid of change, especially since we have seen our practice continue to evolve in recent years. We’re constantly challenging ourselves and focusing on ways to stay ahead of the curve.
LD: It sounds like they walk the walk in terms of equalizing the playing field for women, rather than just pay lip service to the idea of diversity.
MD: Over the past six years the firm has elevated eight female attorneys to partner. Labaton continues to show its commitment to elevating women at the firm. And the firm continues to provide us with opportunities to take leadership positions within the firm as well as encouraging us to build our profile outside of the firm. I believe this is one of the most challenging aspects of any woman’s legal career. If you talk to women across the legal industry they will tell you that one of the biggest obstacles they face is the lack of opportunity. I have been fortunate to work with a firm that recognizes this obstacle and continues to provide me and my female colleagues with opportunities to become leaders in our industry.
LD: Will you talk a bit about the program you developed there, called Institutional Investing in Women and Minority-Led Investment Firms?
MD: I co-chair this event with my partners Serena Hallowell and Carol Villegas. In the initial planning stage, we decided to ask our pension plan clients which issues were important to them. Several clients told us that they would like to discuss diversity investing, so we began researching the issue. Within a short period of time it became clear to us that women- and minority-owned investment firms were facing a number of obstacles in raising capital and gaining visibility with large institutional investors. Once we realized this, one of our primary goals in organizing the program was to help bridge the gap between asset allocators and diverse managers.
We began reviewing studies published in 2017, and the statistics were staggering. We learned that investment management firms owned by women and/or minorities managed just 1.3 percent of nearly $7T in assets under management. Even though many times those women- and minority-owned investment firms perform as well or better than non-diverse firms.
MD: That was my reaction too. And the more I researched and learned about diversity investing, the more I realized how important this conversation was. Even though many statistics were discouraging, I was encouraged by the research that demonstrated that diversity in gender and ethnicity leads to more innovative and thorough investment decisions. I wasn’t surprised by these findings. Rather, I was motivated to do something about it.
Our most recent event showcased two panels — an asset allocator panel and a diverse manager panel. Many of the asset allocators had diversity initiatives or diverse manager programs, so they had already committed significant investment dollars to diverse managers. The manager panel included a range of pioneering women from emerging to established minority-owned investment firms. The asset allocators and diverse managers shared their stories and provided great suggestions on ways to collaborate and move forward in this space.
Our first annual event was a great success and there were many key takeaways from the discussion. One key takeaway concerned the role of investment consultants in this process. Since consultants serve as “gatekeepers” to pension plans, we decided to include the consultant’s perspective in our event the following year. This provided a more balanced discussion in 2019, and helped to further our goal of bridging the gap between asset allocators and diverse managers.
LD: That’s a smart mix. You’re bringing in the gatekeepers to talk and network with the people that need to get through the gate.
MD: Yes. For this reason, we knew that it was important to provide an intimate networking reception after the panel discussions. It was important to keep the conversation going and to keep the ideas moving. We also wanted to provide an opportunity for diverse managers to get face time with asset allocators. The cocktail reception would allow everyone to network, talk about the different diversity initiatives, and begin to build relationships.
I want to say this too — we really enjoyed having two all-female panels. I have been attending investment conferences for most of my career and have gone to events throughout the U.S., Canada, and Europe; it was only recently (in the last three years or so) that I attended a conference and witnessed the first all-female panel.
LD: So you determined you wanted to get the women front and center?
MD: Absolutely. Both men and women are invited to attend and participate. But we really wanted to provide a platform to these female trailblazers, so they could share their expertise with the attendees. These women have incredible stories and insights to share — and I believe the dialogue is different when you spotlight women, especially when discussing investment-related issues, which have been historically dominated by men.
The event continues to be a great success, and we’re committed to an all-female platform.I believe we will continue to see all-female panels at conferences in the future. I am really proud of these events and feel fortunate to collaborate with such inspiring women on this project.
LD: It sounds like a terrific program. And it must be rewarding to be able to combine your practice with the social issues you care about.
MD: Thank you. And yes, my work on various diversity initiatives has been truly rewarding. Another rewarding aspect of my career is serving as outside counsel to a number of state retirement plans throughout the U.S. In this role, I get to collaborate with political officials (State Attorneys General and State Treasurers) who are also deeply committed to the issue of diversity. I am a member of the Democratic Attorneys General Association’s (“DAGA”) Women’s Initiative. The 1881 Initiative is DAGA’s program to see more Democratic women run for the office of attorney general — and win. The 1881 Initiative is named after the year two women first put their hat in the ring for the state office of attorney general — almost 40 years before women had the right to vote. And DAGA currently serves as the only committee with an expressed commitment to elevating and electing women into office. Right now, only six of the 25 Democratic AGs are women, but the goal of this initiative is to recruit, support, and elect more women, so that half of all Democratic AGs are women by 2022.
LD: That sounds like progress…
MD: The 2016 election was such a call to action for so many women. It was a devastating loss, but the silver lining in all of it was that many women were inspired to run for political office. Almost four years later we’re still seeing a record number of women throw their hats into the ring — by running for political office for the first time. But even though we’ve seen a groundswell of interest from women running for office in the last few cycles, statistics still show that you have to ask a woman at least seven times to run before she will say yes. That said, there is a lot of time and effort that goes in to recruiting female attorneys to run for the office of state attorney general. We are definitely making progress, but the only way to change these statistics is by making an effort to join these initiatives and help these campaigns. And that is what I am doing.
LD: We definitely need it. We need much more women and more diversity in the political system across the board.
MD: I couldn’t agree more. The pension landscape has really changed since I began in securities litigation over 15 years ago. Even in the last five years it has been amazing to see the changes in leadership at many pension plans across the U.S. — we now see more female GCs, Deputy AGs, CIOs, and Executive Directors leading the way. I have been really encouraged by this shift and believe we will continue to see more women in leadership roles moving forward.
LD: Any advice for law students or young lawyers?
MD: I think it is important for young lawyers to look for ways to build their individual profiles and develop clients. Associates are so focused on honing their legal skills and becoming excellent lawyers that they may miss opportunities to expand their networks. Spend time on LinkedIn reviewing contacts and schedule a meeting (or Zoom), participate in bar association events, join an affinity group, or secure a speaking role on a panel at a regional or national conference. I seized opportunities to participate on securities litigation panels early in my career, which enabled me to build my profile and expand my network. Law firm partners want to see their associates taking initiative to raise the profile of the firm.
The other piece of advice that I would offer to young lawyers is to work on a project that is not directly tied to their legal practice. Too often we get consumed by what we’re working on, and I believe it’s important to work outside of our comfort zone every now and then. My work on the Women’s Initiative event forced me out of my comfort zone. I was exposed to new issues and concepts in the investment world. I conducted investment-related research, read a book on pioneering diverse managers, and attended seminars on diversity investing. I learned so much about this issue, and that experience helped me grow as a lawyer.
LD: We often ask attorneys, if you weren’t a lawyer what would you be doing? With your background, you have a lot of built-in options — I could see you getting into politics, or given your public speaking experience and your appearance on “The Apprentice” back in 2007, you could pivot into media. Ever think about hosting your own talk show?
MD: I have never given any thought to hosting my own show, but my family and friends have been saying for years that I should be on television. When I starred on “The Apprentice” it was a completely different time — and the world has changed so much since then. Fast forward fourteen years and my appetite to be on television has definitely changed. I will admit that on a number of occasions when I am watching MSNBC and my response is on par with the political pundits, I wonder if I could provide political commentary on the side. But I don’t have a lot of spare time at the moment.
And I would never want to walk away from my practice. I have developed such an important bond with our clients — I feel like we’re in this together. When I returned from filming “The Apprentice” a lot of people thought I would change course — and I could have — but I was already emotionally invested in this practice. That may seem surprising to some people, but it’s the truth.
LD: Do you have a favorite book or movie about the justice system?
MD: “A Civil Action” is one of my favorites, especially because I was so dedicated to the issue of environmental protection in high school and college. “A Civil Action” and “Erin Brockovich” were both life-changing movies for me.
LD: Most lawyers say “My Cousin Vinny.”
MD: My husband would say “My Cousin Vinny.”