Photo by Laura Barisonzi.
Helping investors hurt by securities fraud is a satisfaction earned by many lawyers on our guide to the nation’s best plaintiff financial lawyers. Only a more refined group, however, can point to results that include important precedents within the field. Among those stars is Joshua Silverman, who devotes 100 percent of his practice to securities litigation. The Chicago-based partner previously practiced on the defense side at McGuireWoods before switching to plaintiffs’ work at Pomerantz, which he lauds for its team approach to complex cases.
Lawdragon: How did you first become interested in developing this type of practice?
Joshua B. Silverman: I began my career on the defense side, representing corporate defendants, mostly in commodities fraud, antitrust litigation and civil RICO cases. Although I liked the subject matter, I wanted to represent those wronged by financial fraud instead of protecting perpetrators. Because I had a passion for the markets, plaintiff-side securities litigation was a perfect fit.
LD: What are some aspects about this work that keep you excited about it?
JS: I enjoy the entrepreneurial nature of contingent fee litigation and figuring out how to advance a case. That is a much more creative process than I experienced on the defense side, which was more reactive. I also enjoy Pomerantz’s culture of excellence and the team approach that we take to securities litigation.
LD: Can you elaborate on Pomerantz’s team approach and culture of excellence?
JS: It starts with hiring. We expect that all of our attorneys have or are able to develop capability to take on any aspect of a case, so we are able to staff cases with small teams. That means that the associates on a case have broad levels of responsibility, including depositions of high-level executives.
LD: Of all the work you have done in your career, what would you say is the most interesting matter you’ve handled?
JS: One that stands out is the Countrywide RMBS litigation we pursued on behalf of three institutional investors. We identified a strategy for these three funds to recover large losses in Countrywide mortgage-backed securities that had been overlooked by other plaintiff securities firms. The lawsuit – New Mexico State Inv. Council, et al. v. Countrywide, et al. – was the first non-class institutional investor suit addressing these securities. By moving quickly and supplementing conventional document review and depositions with big data analysis of loan files, we were able to complete an extraordinary amount of discovery in the short time that the court allowed, and we gathered strong evidence for trial. As a result, we were able to obtain a very favorable settlement shortly before trial was to begin. By that time, there were many other Countrywide-related cases, but they were still stuck in the early stages. Our settlement was the first and, to my understanding, the greatest proportional recovery of any of the Countrywide RMBS cases. And we set important precedent with a ruling that investors could show Section 11 damages for asset-backed securities even without a default in payment.
LD: Can you discuss additional precedent-setting work?
JS: In the Perrigo Securities Litigation (Roofers’ v. Papa, et al.), which is ongoing, we obtained the very first certification of a foreign investor class since the Supreme Court’s 2010 decision in Morrison. The stock in Perrigo was dual-listed in the United States on the NYSE and in Israel on the Tel Aviv Stock Exchange. For dual-listed stocks, Israeli law adopts the standards of the country of primary listing. Because the Israeli claims turn on the same standards under the Securities Exchange Act that apply to U.S. investors’ Section 10(b) claims, we persuaded the court to exercise supplemental jurisdiction. This is a ground-breaking precedent for international investors.
In MannKind Securities Litigation, we established that investors may support complaints with expert information. MannKind involved misrepresentations about a drug-device combination that was rejected by the FDA after the company sought approval of a device design that was slightly different from the one used in clinical trials. Because the importance of that change was not readily apparent, we included in the amended complaint an explanation from an expert who literally wrote the book on the FDA new drug approval process. Defendants moved to strike those allegations. We successfully argued that the court should accept the expert’s description of factual information including the FDA’s regulatory practices, because it provided important context to the misrepresentations that the defendants had made to investors.
LD: Are there any trends you are seeing in your practice regarding the types of matters keeping you busy these days?
JS: Two major trends have emerged regarding the types of litigation. First, we are seeing a large increase in cases involving the use of aggressive accounting and projections to cover up operating deficiencies. Second, state-filed Securities Act cases have become more common after the Supreme Court’s Cyan decision in 2018.
Also, Covid has changed many of the procedures in our cases, especially depositions. In the 15 years prior to Covid, I can recall only a single remote deposition. Now remote depositions are common, and this trend may last. I think many lawyers are finding that with the right technology and protocols, a remote deposition can be just as effective as in-person.
LD: Can you describe a recent matter that you’ve handled?
JS: I served as lead counsel in the Nantkwest Securities Litigation. That was an IPO case where the CEO hid a large part of his compensation. In reality, he was the highest paid executive of any company that year, even though the IPO was a flop. It was clear that the defendants hid damaging information in the IPO registration. But it was not easy to show that any given investor’s purchase was traceable to the IPO because a small amount of unregistered shares also traded in the market. After thoroughly analyzing market characteristics and trading patterns, we persuaded the court to accept statistical proof of traceability, which had never been done before. Because of this, we were able to achieve class certification and secure a very favorable settlement for investors.
LD: Did any experience from your undergraduate work push you towards a career in the law?
JS: No. By the time I chose my major, I knew I wanted to go to law school. I chose English literature, a curriculum that would emphasize writing and analysis. And then, I started law school in the summer session, only a month and a half after finishing my undergraduate work. I was always interested in the law.
LD: Is this the type of law you imagined yourself practicing while in law school?
JS: I knew after taking a complex litigation seminar that I wanted to practice high-end litigation, but I did not have a securities focus at that time.
LD: Was there a course, professor, or experience that was particularly memorable or important in what practice you chose?
JS: It would have to be that complex litigation seminar I just mentioned. The course was taught by one of the best litigators in the country, Bill Jentes. At the time, he headed the litigation department of Kirkland & Ellis. On the first day of class, he showed up with one of those ambiguous pictures that looks like a duck from one direction and a rabbit from another. He said that our job as litigators — even as we work against big teams of the smartest lawyers out there — is to make sure that the court and jury see the duck, not the rabbit. And that’s how the whole course was taught, instructing us how to use the federal rules and the class action mechanism to advance the client’s interests at every step.
LD: Was there an early experience or mentor who really helped shape the course of your professional life?
JS: As a young lawyer, I was mentored by the junior partner who directed most of my work, Amy Manning, who is now chair of McGuireWoods’ commercial litigation practice. She taught me the value of thinking strategically, paying attention to detail, and out-hustling my opponents. Those are lessons that I continue to use every day.
LD: How would you describe your style as a lawyer? Or, how do you think others see you?
JS: I hope they see me as prepared. I strive to understand not only my case better than my opponent but also to understand my opponent’s case better than they do.
LD: How do you do that?
JS: For briefing, the team will brainstorm about how we would attack our chosen argument if we were on the other side. And we often come up with better arguments than they do. For discovery, in addition to finding hot docs that are valuable for us, we do a very good job of finding our opponents’ top 20 to 30 docs. And for key oral arguments, we will often do multiple moot arguments.
LD: Do you have a favorite book or movie about the justice system?
JS: It’s probably “Anatomy of a Murder.” The book was written by Michigan Supreme Court Justice and fellow U of M Law grad John Voelker, published under the pen name Robert Traver. It was also made into a movie with Jimmy Stewart that was nominated for Best Picture.