Investment Management &

Financial Fraud Expert Witness

Hedge Fund Expert Witness | Investment Management Expert Witness

Martin Dirks

Mr. Dirks possesses over 30 years of institutional investment experience with expertise in hedge fund management, securities valuation and analysis, corporate accounting fraud, and other complex investment-related issues.  As an analyst and hedge fund manager of short equity funds from 1989 through 2010, he has special expertise in fraud and misrepresentation by publicly-traded companies.  

His corporate industry experience includes working as a senior financial planning analyst at Cooper Industries (1987-1989), a Fortune 100 manufacturing company, and as a program manager/product engineer at Texas Instruments (1979-1985), a leading semiconductor manufacturing company.  He continues to be active in the technology industry serving as an advisor to two early-stage technology companies, Inferess and HedgeSight.

Prior to 2004, Mr. Dirks managed Dirks Capital Management, a firm managing long/short equity hedge fund (2000-2002) and sub-advised a long-only portfolio for Davidson Investment Advisors (2001-2004), the investment management subsidiary of DA Davidson.  He managed a long/short equity portfolio for Harvard University’s endowment (1994-1999) which generated an average unleveraged annual return on investment of 43% per year, increasing the portfolio from $110 million at December 1993 to $870 million at June 1999.  Mr. Dirks also worked as an equity analyst for Odyssey Partners (1991-1993), a $2 billion hedge fund managed by Jack Nash and Leon Levy, (co-founders of Oppenheimer & Co.) and Feshbach Brothers (1989-1991), a $1 billion short-only equity hedge fund.

Marty Dirks has provided investment consulting, investment research and expert witness services to investment funds and law firms at his own firm, Investment Strategy & Analysis, since 2004.  From 2012 to 2017, he also provided investment consulting and expert witness services as part of Milliman, Inc., an international consulting firm with more than 3,000 employees worldwide.  At Milliman, he was the sole investment advisor for several defined benefit and defined contribution pension plans, endowments and foundations.  He also performed asset allocation studies, manager selection searches and monitored investment managers.

Since 2006, Mr. Dirks has been an adjunct professor of finance at Golden Gate University in San Francisco and currently teaches Portfolio Management, the advanced investments course for the MBA program.  He was the director of research at McCullough & Associates, a value equity manager, from 2010-2012.  He has been a board member for the Federated Retirement System for the City of San José since 2010 where he works with staff on manager selection and investment strategy issues.  From his roles as an Adjunct Professor and Investment Consultant he has proven his ability as a confident public speaker with the ability to convey technical concepts to diverse audiences.

Education

 

  • Harvard Business School, Boston, Massachusetts

    • Master in Business Administration, 1987.  Ellis/LeBaron Fellowship recipient.

  • Bemidji State University, Bemidji, Minnesota

    • Bachelor of Science in Engineering Physics, 1979, summa cum laude.  
       

Other Education

 

  • Yale University/Commonfund, New Haven, Connecticut

    • Endowment Institute, Level II (2014)

  • Bar Association of San Francisco, San Francisco, California

    • Deposition Bootcamp (2009)

  • McMillan Analysis, Burlingame, California

    • Advanced Options Seminars (2005)

  • International Trading Institute, Chicago, Illinois

    • Trading & Pricing for the Professional Options Trader (2004)

  • Market Compass, San Francisco, California

    • Advanced Options Curriculum (2002)

Affiliations

 

  • Board Member, Federated Retirement System for the City of San José

  • Adjunct Professor of Finance, Golden Gate University

  • Event Coordinator, CALAPRS Trustee Roundtable

  • Member, Global Association of Risk Professionals

  • Member, Gerson Lehrman Group Councils

  • Advisory Board, Inferess, Inc.

  • Advisory Board, HedgeSight

Representative Litigation-Relevant Experience

  • Business Valuation Experience

    • Fund of Hedge Funds – Prepared valuation analysis for fund of hedge funds under damaged and undamaged scenarios.

    • Hedge Fund – Prepared valuation analysis of long/short equity hedge fund.

    • Private business – As a corporate merger and acquisition analyst, prepared many discounted cash flow-based valuation analyses with and without synergies.  Several businesses recommended were subsequently acquired.

    • Publicly-traded businesses – As an institutional investor, prepared valuation analyses for hundreds of publicly-traded businesses and executed transactions in the public markets based on these valuations.  Individual stock positions were up to $70 million in size.

  • Complex Damages Calculation Experience

    • Calculated damages for options arbitrage hedge fund due to margin calls miscalculated by the prime broker, a top five international investment bank.

    • Calculated damages for loss of option value of warrants issued by publicly-traded company which were not allowed to be exercised according to the contractual agreement.

  • Investment and Corporate Financial Fraud Experience

    • Evaluated fund of hedge funds, which invested in a Ponzi Scheme, for inappropriate business practices:  due diligence, accounting, anti-money laundering policy and client communications.

    • Analyzed financial statements of corporation using bankruptcy and fraudulent conveyance (inappropriate expense allocation to fraudulently transfer assets) to avoid creditor’s claims.

    • As an institutional investor, analyzed hundreds of publicly-traded corporations with accounting fraud or other misrepresentation for short selling and executed the resulting investment transactions.

    • Defense expert for hedge fund criminal fraud cases, People vs. Glenn Jackson [Fund:  Highland Capital Partners] (2013) and People vs. Chad Sloat [Fund:  Black Diamond] (2012).

  • Testimony Experience

    • Deposition and Testimony, American Arbitration Association, January 2008, for options arbitrage fund case.

    • Testimony, American Arbitration Association, December 2015, hedge fund intellectual property.

    • Deposition, June 2018, class action against corporate defined contribution pension plan.

Business Valuation & Damage Calculations
  •  Valuation Analysis for Hedge Funds
  • Corporate Merger & Acquisition Analysis
  • Discounted Cash Flow-Based Valuation Analyses (with and without Synergies)
  • Hedge Fund Damage Calculations
  • Margin Call Damages
  • ​Valuation of Options & Warrants
Investment & Corporate Financial Fraud
  •  Hedge Fund Criminal Fraud
  • Ponzi Schemes
  • Inappropriate Business Practices
  • Due Diligence
  • Publicly-Traded Corporation Accounting Fraud & Misrepresentation
  • Financial Statements Analysis
  • Bankruptcy and Fraudulent Conveyance​
  • Misleading Accounting
Investment Management
  •  Management of Long/Short Equity Hedge Funds
  • Short-Only Equity Hedge Funds
  • Portfolio Management
  • Defined Benefit & Defined Contribution Pension Plans
  • Endowments & Foundations
  • Asset Allocation Studies
  • Monitoring of Investment Managers
  • Large Transactions & Execution of Securities

Our Experts    |    Services    |    FINRA Arbitration    |    Mediation    |      Pro Bono Services    |    Contact

Barrington Financial Consulting Group, Inc.

3800 American Blvd West | Suite 1110 | Bloomington, MN  55431
800-741-0704  |  952-857-2411  |  Fax: 952-835-1504  |  E-mail


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