Photo by Laura Barisonzi.
John Rizio-Hamilton is a masterful securities litigator, recovering hundreds of millions of dollars for defrauded investors in cases that impact society on a broader scale, shoring up protections for investors battling mammoth corporate interests. He’s recognized broadly as an effective and unrelenting attorney.
Even so, he almost didn’t go to law school.
“I wanted to be a writer after college,” he admits. He spent a couple years as a beat reporter in Brooklyn, investigating local government corruption. But the law was in his blood.
His parents were lawyers, and he met his wife in law school, when they were placed together on the same moot court team and traveled together for a competition in constitutional law. “We fell in love – and we won the competition,” he says.
After graduating Brooklyn Law School summa cum laude, Rizio-Hamilton secured clerkships at two of the most sophisticated courts in the country, the Southern District of New York and the Second Circuit. He then joined the plaintiff securities litigation powerhouse Bernstein Litowitz Berger & Grossmann.
He chose the firm because he thought it would give him the best chance to use his law degree to “make a positive impact on society” while working on high-stakes, complex class actions. It did not disappoint: He spent most of his associate years fighting for investors in Bank of America over misstatements surrounding the merger with Merrill Lynch following the 2008 subprime mortgage crisis, a case which ultimately settled for an eye-popping $2.4B. Having demonstrated his litigation prowess on these high-profile cases, Rizio-Hamilton’s rise to partnership was rapid: He was elected to the firm’s partner ranks five years after joining the firm.
Rizio-Hamilton’s first case as a partner involved the JPMorgan London Whale trading fiasco, in which he helped a team recover $150M for investors. His work made headlines again most recently with the sweeping securities class action against Signet Jewelers, where he was able to set a game-changing precedent in the securities bar by recovering $240M for investors in a case involving alleged misstatements related to sexual harassment at the company.
An adept litigator with an entrepreneurial mindset, Rizio-Hamilton – a member of the Lawdragon 500 Leading Plaintiff Financial Lawyers – has led his firm’s expansion into Canadian markets with outreach to institutional investors with potential fraud claims there, and helps run the firm’s Global Securities and Litigation Monitoring Team.
Now, over a year into the global pandemic that’s roiled financial markets, Rizio-Hamilton is keeping watch for fraud that may yet be revealed.
“We’ll be ready,” he says. “No matter what comes out, I guarantee you we’ll be ready.”
Lawdragon: Tell me about Signet. A $240M recovery for investors over sexual harassment and gender discrimination claims? That’s pretty incredible.
John Rizio-Hamilton: Well, thank you. It was a really interesting case, and sort of the best of the best when it comes to securities class action law because it was highly complex, extremely difficult to litigate, but when you do it well, and you achieve a successful result, you recover not only a significant amount of money for investors who have been harmed, but you also affect corporate behavior in a way that benefits society more broadly.
LD: It seems like you were up against a lot with that case, to prove fraud over sexual harassment claims or misconduct.
JRH: Signet was really unique because it had these two parts. One was very traditional, concerning misstatements relating to the value of the company’s in-house loan portfolio. The unique part involved claims that were based on misstatements and omissions related to sexual harassment.
Securities class actions based on the statements and omissions relating to sexual harassment at the defendant company have a really, to put it mildly, mixed track record in the courts. They often get dismissed and they often face insurmountable challenges of class certification. It’s just not the kind of thing that judges typically think a securities class action is supposed to remedy. Now, hopefully judicial attitudes about that are changing because this absolutely is the kind of thing that securities class actions can and should be used to address.
We litigated Signet for years and we defeated the motion to dismiss with respect to both kinds of claims. We’re one of the few cases in the annals to overcome motions to dismiss aimed at claims based on underlying sexual harassment, because many courts hold that the statements that are at issue in those cases are not material, meaning they’re not important to investors. But, we defeated that challenge in this case. We then faced a whole new set of hurdles at the class certification stage because defendants argued that, in order to determine whether the statements were false, you actually have to go and look at each alleged act of sexual discrimination and determine whether it occurred.
We had hundreds of such alleged acts of sexual discrimination in our case, and defendants said it would require a hundred mini trials on each of the alleged harassments. In that kind of scenario, class certification’s not appropriate. We had to overcome those arguments, which we did at the district court level.
LD: How did you overcome that exactly? To not litigate every single incident, did you have to prove it was a systemic issue? I saw that you used statements from the code of conduct, which seems like a novel move.
JRH: It’s very unusual to get code of conduct statements sustained. Defendants have had considerable success in getting cases based on code of conduct statements dismissed. What we did here was argue that in context, the statements were specific enough to be actionable and significant enough to be material because the underlying misconduct was so severe.
Then, to overcome the class certification arguments, we argued that we didn’t have to prove whether each alleged incident was true. We just had to demonstrate that the company wasn’t forthcoming about what it had been accused of. Part of that was wrapped into the fact that the sexual harassment allegations were made in the form of sworn declarations that had been submitted in this underlying employment discrimination arbitration against the company.
The company had made a litigation disclosure about that arbitration in which they characterized the allegations as simply concerning store-level gender discrimination. We argued that statement was false, because what the underlying arbitration really alleged was severe instances of widespread sexual harassment, all the way up into the company’s high executive ranks. We argued that statement was false, regardless of whether each alleged incident of harassment had occurred, because they misrepresented what they had been accused of.
To my knowledge, it’s the only case involving misstatements related to alleged sexual harassment that has been certified by a federal court in the securities class action context. That made it unique.
LD: That, and the amount of the settlement.
JRH: A large settlement compensates investors for the harm they suffered, and sends a message to corporate boards and executives that there will be a significant price to pay for this behavior. Changing corporate behavior on a wider scale is key.
LD: What cases are you working on these days?
JRH: I’m in active litigation on a really interesting case against Mattel, surrounding the accounting for a deferred tax asset. It’s super interesting because it involves the coverup of a known misstatement by the company and its auditor, PricewaterhouseCoopers. It’s in the Central District of California and the judge recently sustained our complaint, which alleges some pretty appalling behavior that also demonstrates more broadly why auditors are not keeping the public safe from financial misstatements.
The central idea in the case is that, once the company and PwC figured out that the company had materially misstated its financial results, instead of correcting it, they went on to cover it up for years until they got a whistleblower letter that forced them to come clean.
I’m also working on a securities class action case in the District of New Jersey involving misstatements and omissions concerning an international bribery scheme that a company was involved in to secure valuable permits for its business in India. We filed our case and got over a motion to dismiss in part. While that was on appeal, the Department of Justice indicted the company’s former president and former chief legal officer for engaging in the bribery scheme on which our case was based. So, that criminal prosecution is now proceeding in parallel to our civil case. It’s fascinating to litigate a securities class action based on bribery, particularly when there’s a parallel criminal case that could very well end in convictions.
LD: You’ll have to keep us posted on that one! You also have an interesting niche with your work for investors in Canada. How did that come about?
JRH: I wanted to figure out ways to connect with institutional investors as much as I could, to tell them about what we do. We’re really very good at this work and I knew we could serve their interests in unique ways that other firms couldn’t. This had been on my mind when I wound up taking an accounting fraud case a couple years ago against a company called Penn West. Penn West was a company based in Canada, and its stock was dual listed on the New York Stock Exchange and the Toronto Stock Exchange. Our case was in New York, and there was a parallel securities class action against the company in Canada.
When it came time to try and resolve the case, the company wanted global peace, meaning, they wanted to resolve both the Canadian and U.S. securities class actions at the same time. We mediated in Toronto with the law firm that was leading the Canadian case, working together to come to a resolution that would solve both actions. Then we distributed the funds to investors in the United States and Canada.
Through that case, I got talking to the Canadian firm and the lawyers there about the need among Canadian institutional investors who might be pursuing or interested in pursuing securities fraud class actions in the United States when circumstances warranted it, and needed a connection to the right type of firm to assist them.
The Canadian firm thought it would be a really good idea to partner with us and introduce us to their clients, which they did. It branched out from there, and I also started conducting broader outreach in Canada after that.
LD: That’s such a brilliant way to build business in new markets, really connecting with potential clients who could be in need of your services.
JRH: It’s something I take a lot of pleasure and pride in. I’m introducing our firm and what we do to investors in another part of the world who have significant interest in the integrity of the U.S. securities markets. I’m so very proud of what we do. It’s always what I’ve wanted to do as a lawyer in private practice. It’s really a pleasure for me to be able to meet with them and tell them about the firm’s accomplishments and how we can serve their interests when their beneficiaries lose money as a result of corporate misconduct.
It’s really a wonderful addition to have as part of my legal career that is separate and apart from actually litigating the cases, because I love to litigate the cases. It’s challenging, it’s exciting, it’s fun. It’s really hard because we go up against great lawyers on the other side. I also love the opportunity to do outreach and meet with these investors. I love that just as much as the hand-to-hand combat of litigation.
LD: When you say you always wanted to do this, do you mean securities law specifically? Or, when did you first know you wanted to be a lawyer?
JRH: It goes back a ways. I grew up in Philadelphia, and my parents were plaintiffs’ lawyers. They had their own firm, Rizio and Hamilton, where they handled personal injury cases. Growing up in my home around the dinner table, we talked about what it was like to be a plaintiffs’ lawyer and the importance of representing the little guy against large corporate interests. That stoked an interest in me from a very early age.
As I got older, I wasn’t sure that I wanted to go to law school. I really enjoyed writing, so, after graduating from college, I came to Brooklyn and took a job as a local news reporter, covering local community news and politics. I also did a weekly column about Brooklyn politics, which was fascinating at the time because it was dominated by people who have since gone to jail for corruption. All the backroom dealings and sordid affairs were very fun to cover as a young reporter.
My beat stretched all over the borough, down in Coney Island and all the way up to the brownstones in Brooklyn Heights. I saw all these different parts of Brooklyn, and time and again, I would see these lawyers doing interesting, beneficial things in the community. Ultimately, I decided to go to law school, much to my parents’ relief.
LD: So Brooklyn Law was a natural choice! Then you clerked in SDNY and the Second Circuit, which would be incredible training ground.
JRH: Right after graduation, I knew I wanted to clerk for judges. I had thought it would be really interesting to be part of the judicial process. I was very fortunate to clerk for two outstanding judges who were also outstanding human beings. I clerked for a district court judge named Sidney Stein in the Southern District, and then Chester Straub in the Second Circuit. The guiding principle in both chambers that I worked in was to get the right answer under the law and do the right thing. That’s a life lesson that I’ve applied to my practice. It guided my career choice to come to Bernstein. It has guided how I litigate my cases. Doing the right thing is part of the DNA of this firm.
LD: Any other big take-aways from your clerkships?
JRH: Throughout my time with judges Stein and Straub, I developed a real keen interest in complex class litigation. Rule 23 cases were totally fascinating to me and I saw that they were a way to use civil litigation to make a large impact and to do it on behalf of the little person against the big person, and, in particular, the large corporate interest. That really resonated with me. I was also very committed to public interest law, so I wanted to find a way to marry these interests in a complex class litigation with a commitment to doing it in a way that had a positive impact on society.
I also learned how to dig deep and persevere. I once went to Judge Stein and told him that I had looked very thoroughly and there wasn’t a case on point and he very politely told me that I should go look again. I went and looked again, very thoroughly, and told him again, unfortunately there just wasn’t a case on point. He told me, again very politely, that I should probably look again. I looked at for a third time and dug deeper and deeper and finally found one case that was obscure, but on point. I’ve always taken from that, that you just have to be extremely driven and scrappy as a lawyer and keep digging until you find the helpful case, the helpful fact. It’s kind of like, be like water and find a way. Find a way to the fact or the legal principle that you need. It’s always there. You just have to look harder to find it.
LD: What a great philosophy.
JRH: That is definitely my philosophy in litigating. The only other guiding light is to treat my adversaries with respect. As lawyers, we have lots of fights over important substantive things, but it’s also important to avoid unnecessary skirmishes and treat each other with respect, even when we’re at odds.
LD: Did you go straight to Bernstein after your clerkships?
JRH: Yes, because it was the one place that I thought really would marry those two desires for me by enabling me to work on really high stakes, complex class actions and to do it in a way that was socially beneficial.
LD: The firm seems like a perfect fit for you, because it’s filled with really smart, sophisticated attorneys who are just as good as the corporate defense lawyers, yet fighting for the little guy, as you say. Firms like yours are exciting because they’re correcting that long-standing imbalance in the justice system.
JRH: I like to think of it as pound-for-pound, we’re the best firm in the world. Meaning, we may be smaller than these large corporate defense firms, but we take them on in our cases all the time and their teams of lawyers may be double or triple or quadruple the size of our teams, but it doesn’t matter. We drive results and we achieve great results for our clients, even going up against these Goliaths. It’s really fun. It’s hard, but it’s really fun. Honestly, it’s exhilarating.
LD: I think that’s where greatness in this field comes from, in part, when you really, really enjoy the work. And it seems like Bernstein Litowitz is the type of place where even younger associates get real experience.
JRH: It’s a place where you learn by doing, and you learn at the elbow of more experienced lawyers. It’s also very much a meritocracy. We give lawyers all the opportunities that they express to us they want, and that they show they can handle. That allows younger lawyers to develop.
I remember as an associate working on the Bank of America-Merrill Lynch merger case, all the partners would be in the room with the associates and we would hash out strategy together. There were times when we had to write a brief on short notice, and we would all get together in a conference room, hook up a laptop to the large TV screen, sit and write the brief together.
It was awesome. We taught each other. Not even explicitly, just ordering ideas, designing strategies, putting the brief together. Even on the level of writing the sentence, we worked together. That helped shape my approach to team building, and also my skills as a lawyer.
LD: That’s a testament to the collaborative culture of the place, all these lawyers of different experience levels in one room, writing sentences together. That’s impressive.
JRH: It was fun. There were a lot of late nights, and a lot of Chinese food was eaten together. Having that kind of culture and team spirit enabled us to really succeed.