Securities cases don’t often make it to trial, but the best attorneys are always ready to take them there. Daniel Drosman has had extensive trial experience from all vantage points: as a prosecutor, a defense lawyer, and for the past two decades as a plaintiffs’ securities fraud lawyer at Robbins Geller.
In a headline-grabbing case last year, Drosman and his team at Robbins Geller, along with co-counsel Motley Rice, brought a securities fraud class action claim against Twitter. The class of institutional investors alleged that the social media giant had hid poor user growth and engagement, which came to light alongside a 20 percent stock drop.
Both sides were preparing for trial in the U.S. District Court for the Northern District of California. At the eleventh hour, a settlement was reached – for a record-breaking $809.5M for plaintiffs.
Drosman’s extensive trial experience includes serving as Assistant District Attorney for the Manhattan District Attorney’s office, and a few years practicing white-collar criminal defense at Weil Gotshal. He later worked as an Assistant United States Attorney in the Southern District of California, where he was honored with a Department of Justice Special Achievement Award.
Drosman, who sits on his firm’s Management Committee, is a member of the Lawdragon 500 Leading Lawyers in America as well as Lawdragon 500 Leading Plaintiff Financial Lawyers in America.
Lawdragon: Will you describe your practice for our readers?
Daniel Drosman: I’m a trial lawyer, so my focus in every case is preparing the case to be tried to a jury. It’s rare in securities cases to have jury trial experience, but I’ve been fortunate to have had that experience here, which makes a big difference. Prepping a case for trial is a team effort – it’s a symphony. There are lots of different disciplines and team members involved – the investigation, forensic accountants, experts, electronic and digital evidence specialists, digital media and presentation designers – so I enjoy working on all the different aspects of trial preparation.
Lawdragon: You achieved an outstanding settlement for investors in J.P. Morgan mortgage-backed securities, a notoriously complex and intensive type of case. What were you up against in that case, and how were you able to achieve that result?
DD: There were more than a few novel legal challenges in that case. The court initially granted in part defendants’ motion to dismiss. An appeal in a different case the following year, NECA-IBEW Health & Welfare Fund v. Goldman Sachs & Co., resulted in an opinion that allowed us to successfully move for reconsideration in the J.P. Morgan case. We also obtained a class certification that certified the most broadly defined plaintiff class in any RMBS class action to date. The $388M recovery is more than two and a half times greater than the average percentage recovery in previous RMBS class action settlements, so it’s something we’re very proud of as a firm.
LD: Can you tell us about your landmark wins for investors against the credit rating agencies? What were you up against, and what impact has this had on investors’ rights?
DD: As plaintiffs’ counsel, we are always up against the most well-resourced entities on the planet. They have almost unlimited resources to litigate, and every incentive to fight as hard as they can if they’re facing very serious allegations of financial misconduct. These cases were no exception. We were one of the first plaintiffs’ counsel to defeat the rating agencies’ traditional First Amendment defense and their mischaracterization of ratings as mere opinions not actionable in fraud. In all these cases, the key is patience – the calm determination to build a solid case step by step. Some cases take years to build and litigate to an impactful result, which really reflects the determination and principled approach of our clients. And that was especially true in the case involving the ratings agencies.
LD: How was your experience as an ADA? Are there lessons or tactics you learned during that time that you still employ in your practice today?
The class alleged that Twitter had hid poor user growth and engagement – which came to light alongside a 20 percent stock drop.
DD: I learned to listen, and I learned that trials are won or lost almost entirely in preparation, not just the courtroom.
Juries teach you a lot, but only if you listen. It was Manhattan in the 1990s, and I had a docket of very serious cases – domestic violence, shootings, homicide. And they will hold the prosecutor’s feet to the fire. They will listen intently, ask great questions and really test your case. Juries are a dynamic collective intelligence that you need to learn to deeply respect and learn how to listen. The best trial lawyers had that humility, and I tried to emulate that. Second, that also meant being prepared. The moment of a criminal trial involves multiple tragedies – the victim and their family, but also the defendant and their family.
You need to be prepared and thoughtful in every single case because there are important rights at stake on all sides, and as the prosecutor, you have to advocate for accountability and ensure fairness and that the defendant’s rights are upheld. That means you need to do your homework, rigorously work up every case. That stays with you, long after you are no longer a prosecutor.
LD: As a member of your firm's Management Committee, can you share some strategic plans for Robbins Geller in the coming months or years?
DD: We’ve had some incredible success and have a terrific, deep team. We want to contribute to building the next generation of leaders in the plaintiffs’ bar. One of our most recent initiatives is our Diversity Fellowship. Having lived and professional experience reflecting the broadest possible range of backgrounds is a key part of our success. We’re offering 2L Diversity Fellowships to law students with a commitment to diversity, equity and inclusion and students from groups historically underrepresented in the legal profession. The Fellows selected will receive a paid summer associate position in our main office in San Diego, Calif., and a $30,000 scholarship to help with law school tuition. It’s something we’re excited about.
LD: How do you talk about your firm to potential recruits – what makes it unique?
DD: We have amazing clients and get to practice at a very high level. Our clients – funds that protect the life savings of firefighters, teachers, ironworkers, laborers, police, public servants – trust us to recover funds they’ve lost to fraud and abuse, something we’re proud to do. And in those cases, we give young lawyers real responsibility. They’re standing up in court, taking depositions, arguing motions early in their careers. So if you want to do meaningful work for amazing clients, this could be a place for you.
LD: How has firm management changed since the start of your career?
DD: While the people running the firm have changed since the start of my career as a securities fraud litigator 21 years ago, the firms’ management consistently has made excellence a top priority. There has always been a culture of bringing in the most talented lawyers and maintaining the capitalization necessary to maximize the recovery for our clients. The firm’s management has also given its lawyers the autonomy to run cases so that the whole team feels like they have a real stake in the litigation.
LD: How would you describe your style as a lawyer? Or how do you think others see you?
I’m a firm believer that I make better decisions when I obtain input from others.
DD: As a lawyer, I am tenacious. I also look for creative solutions and always retain a singular focus on the end result. I really value collaborating with other lawyers on the team. I’m a firm believer that I make better decisions when I obtain input from others. Ever since I was a prosecutor, I’ve enjoyed the feeling of operating as part of a team. It promotes a sense of camaraderie that is essential to maintaining motivation through the years of hard-fought litigation that characterize our cases.
The Twitter litigation is a perfect example of the importance of teamwork. There was a distinct lack of hierarchy on the team where everyone on the team, including the most junior attorneys, played a vital role in reaching a settlement that will be the largest securities fraud class action recovery in the last 20 years in the 9th Circuit and the second-largest ever in that Circuit.
LD: Do you have a favorite book, movie or TV show about the law?
DD: My favorite legal book, which I first read in college, is Truman Capote’s “In Cold Blood.” It tells the true story of the murder of a Kansas family in 1959. Capote actually traveled to the small Kansas town with his good friend Harper Lee to investigate the murders that mystified investigators and riveted the nation. His pioneering novel describes the crime from the beginning through trial, conviction and ultimately execution. The deep dive is fascinating because it allows the realization that decent people can commit horrible crimes, a truth I never forgot when I worked as a prosecutor.