Sperlinga Advisory's litigation support clients have
included money managers, other buy-side firms (pension/endowment),
major broker-dealers and a series of assignments performed for
a Department of the U.S. Government. In addition to our report
writing and testifying experience, SA LLC has:
i) Valued and provided risk analysis associated with complex
mortgage and asset-backed securities;
ii) Performed forensic structured finance analysis;
iii) Led in-depth document review and due diligence teams; and
iv) Provided technical deposition interpretation;
Case studies can be reviewed using the links on the right.
These assignments do not represent a complete list of the
Firm's experience, but rather provide a sample of SA LLC's
previous engagements involving litigation. Certain of our
economic (i.e. non-litigation) case studies involved
working with attorneys and can be found
Sperlinga Advisory’s Principal, John Contino, began his
securities industry career in 1983, and worked for
PaineWebber and Drexel Burnham prior to founding the Firm.
His CV can be accessed by clicking
George Miller, Chapter 7 Trustee for American Business Financial
Sperlinga Advisory worked for Kirkland and Ellis, representing Greenwich
Capital Financial Products ["GCFP"]. The Chapter 7
Trustee [Mr. Miller] for American Business Financial Services Inc.
["ABFS", a Philadelphia-area mortgage originator]
brought suit against GCFP, stemming from a DIP loan made to ABFS by GCFP.
v. Greenwich Capital Financial Products, Inc.:
We were asked:
i) To perform forensic valuations on certain complex, non-agency mortgage
securities [specifically, REMIC residuals] which served as collateral for
ii) To explain those securities in reports to the court; and
iii) To give an opinion as to the "commercial reasonableness" of the sale
of these securities.
SA LLC's principal was named a testifying expert in this case and filed expert
and rebuttal reports. These reports were part of a pre-trial summary
judgement motion by GCFP, which was granted on all counts by the
Federal Housing Finance Agency Related Cases:
Sperlinga Advisory was retained by the counsel of four large banks
to assist in the defense against lawsuits brought by the Federal
Housing Finance Agency (“FHFA”) on behalf of FNMA and FHLMC.
Our work in these cases took place in 2013 through 2014, and involved
cases filed in the SDNY. In three of the cases, we were asked to
attribute the losses incurred on the non-agency residential mortgage
securities at issue to various factors, using both SA LLC's
analytical capabilities and our principal's direct knowledge of
those forces acquired as a mortgage credit manager at the time
these securities were acquired.
In the fourth case, Sperlinga Advisory was asked to value certain
of the non-agency mortgage securities at issue, and to defend its
results against alternative valuations provided by both
third-party pricing sources and an opposing expert.
These cases all settled prior to trial.
The Maplebrook School:
The Maplebrook School, based in Amenia, NY, served developmentally
disadvantaged children. Fernandez & Burnstein was the law firm
representing the School. A portion of the School's endowment was
invested in complex mortgage derivatives, whose value plummeted
during a period of rising interest rates.
Sperlinga Advisory was retained to write a report, consisting of:
i) An analysis of the appropriateness of these securities as
investments for the School's endowment;
ii) A forensic analysis as to how the risk / return profile appeared at
the time of their purchase; and
iii) An analysis supporting the School's damage calculation.
The company who sold the School the securities in question settled
with the School prior to litigation.
TCW v. Jeffrey Gundlach et. al.:
Sperlinga Advisory worked for Munger, Tolles & Olson, who represented
Jeffrey Gundlach and DoubleLine Capital. Mr. Gundlach had been a star
mortgage securities manager for TCW. In late 2009, TCW fired Gundlach
and three other defendants, accusing them of misappropriation of trade
secrets, among other charges. Shortly after their dismissal, Gundlach,
the other named defendants and roughly 36 members of the TCW MBS team
formed DoubleLine Capital. TCW sued Mr. Gundlach, DoubleLine and
others, asking for $566MM in damages. Mr. Gundlach countersued for
$500MM in damages related to his termination. Representing TCW was
Quinn Emanuel with John Quinn leading the TCW trial team.
The MTO trial team used our expertise from the
early stages of the case to develop the requisite background knowledge
of mortgage security modeling and the workings of the mortgage market.
SA LLC's standing came not only as mortgage security participants and
users of similar mortgage models, but also as a designers
and builders of them as well. Several expert reports were produced, and
Sperlinga Advisory's principal also testified at trial in Los Angeles
in September 2011. The challenge was to explain to the jury the complex
tools which were alleged to have been misappropriated and how they are
used in the industry.
The jury found for:
i) Mr. Gundlach on the back wages claims and awarded him $66.7MM; and
ii) TCW on their claims, but determined Mr. Gundlach did not act willfully.
There were charges where the judge determined the damages, and SA LLC
provided support with respect to the post-trial hearings which resulted
in a settlement of all remaining civil litigation between TCW and DoubleLine in December
2011. Reuters wrote this
about the settlement.
Nodvin v. N.F.S.C.:
Marvin Nodvin was a high net worth individual who had invested in
mortgage derivatives through a securities firm which became defunct.
National Financial Services Corporation ("NFSC", a division of
Fidelity Investments) was the clearing broker for the defunct
securities firm. Nodvin lost money when the prices of the mortgage
derivatives he owned dropped. Mr. Nodvin brought action against
NFSC, because NFSC had loaned Mr. Nodvin money through the defunct
broker to purchase the mortgage derivatives. Cohn Lifland Herrmann
represented Mr. Nodvin, and retained Sperlinga Advisory.
Sperlinga Advisory wrote a report describing the mortgage derivatives
in which Nodvin had invested. SA also arranged for Cohn Lifland to
retain another (independent) expert, to work on the case. Lengthy
depositions followed the submission of our report. Sperlinga Advisory's
Principal, John Contino, was called to testify as an expert before an
arbitration panel, for the purpose of explaining the nature of the
mortgage derivatives to the arbitration panel.
Sperlinga Advisory further retained to work on a related case in
Atlanta, Georgia, also involving Mr. Nodvin and NFSC, where the
representing Mr. Nodvin were Bondurant, Mixon and Elmore. That matter
was tried in Georgia state court.
The Merchant's Trust:
The Merchant's Trust was located in Burlington, Vermont and invested
funds on behalf of their trust customers. The Trust Company invested some of
these funds into the Piper Jaffrey Government Income Fund. These trust
customers lost money when the Piper Jaffrey Government Income Fund
dropped in value. Gravel & Shea was the law firm that represented
The Merchant's Trust.
Sperlinga Advisory was retained to write a report as to the risk profile
of the Piper Jaffrey Government Income Fund, and the appropriateness of
that investment for The Merchant's Trust's typical trust customers. The
dispute for which SA was retained to help resolve was between the Trust Company
and their providers of director's and officer's insurance. Gravel
& Shea's opponents settled the case after our report was submitted
and prior to any litigation.
Subsequently, Sperlinga Advisory's Principal was called
upon to testify before a Federal Judge in District Court in
a related case. This litigation was brought by class action
attorneys representing a small group of the trust company clients,
who did not accept the settlement offered by The Merchant's Trust.
US Department of Labor - Office of the Solicitor:
Throughout the mid-1990’s [with our most recent assignment
ending in 1999], Sperlinga Advisory has been involved with the
US Department of Labor – Office of the Solicitor with what was
called the Derivatives Project.
In the cases upon which SA LLC worked, the US DOL was involved in the
prosecution of cases under ERISA (generally, involving pension
plans) and the Taft-Hartley Act (generally, union funds).
Sperlinga Advisory served the DOL through several investigations,
in which mortgage-backed securities were involved. The firm acted
in the capacity of an investigative expert. Such an expert works
with both investigators and DOL attorneys to assist them prior to
charges being filed, and included:
i) Performing forensic financial analysis to determine the
prudence of a particular money managers past actions;
ii) Performing similar forensic analysis to determine suitability
of certain securities;
iii) Sitting in depositions to assist DOL attorneys with witnesses
who may have provided technical answers;
iv) Provided advice to DOL attorneys as to possible defenses of
money manager actions they might face; and
v) Authored reports that summarized findings with respect to
all the above mentioned points.
Because investigations involved participants who had not been
charged with any crime, Sperlinga Advisory operated in an environment
of strict confidence. As such, we cannot provide any details
as to the assignments upon which we worked.