Senior Associate Dr. Shastri Sandy coauthored a recent Colorado Technology Law Journal article describing how the use of AI decision models may cause disparate impact in areas such as credit and financing, employment, healthcare, and housing.

The authors provide examples of how AI models may contribute to disparate impact, discuss protected classes and the relevant laws that may be violated due to disparate impact, and include suggestions of where biases in AI decision-making may be headed in the future. also provide an overview of statistical, economic, and qualitative tools that can be used to evaluate and mitigate AI-induced disparate impact.

The full article, “The Disparate Impact of Artificial Intelligence and Machine Learning,” is available below.

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“As we continue to expand the firm’s bankruptcy and restructuring capabilities, David will be a tremendous asset to our clients, enhancing both our testimonial and advisory capabilities,” said Brattle President & Principal Dr. Torben Voetmann. “With his breadth of experience working on contentious, high-profile disputes, David is a wonderful addition to the Brattle Bankruptcy and Restructuring team and our firm more broadly.”

Mr. Prager specializes in bankruptcy and restructuring matters and corporate value and solvency disputes. He has consulted on or testified in a number of high-profile bankruptcies and restructurings, including those of Enron, Lehman Brothers, Archegos, Adelphia, Energy Future Holdings, Puerto Rico, Detroit, Syncora, and Tribune. Topics of his services have included formulations of reorganization plans, evaluations of value allocations and reasonableness of projections, and the resolution of complex capital structures.

As a financial advisor, Mr. Prager has supported both creditors and debtors in major corporate and municipal restructurings, and served in interim C-suite roles, including at The PMI Group and Syncora Guarantee. He also has expertise in fraudulent conveyance actions and forensic and trading investigations.

“Brattle’s proven commitment to quality, incisiveness, and collaboration is a perfect match for the restructuring and testimonial services I provide in matters featuring a high degree of complexity,” said Mr. Prager. “I look forward to working with my new colleagues to solve complex financial restructurings, corporate valuation disputes, and related financial matters.”

Prior to joining Brattle, Mr. Prager was a Managing Director at a global financial and risk advisory firm. He previously focused on restructuring and complex financial litigations at a financial advisory firm.

To learn more about Mr. Prager, see his full bio.

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“With his extensive expertise in securities trading, valuation, and causation, Drew is a robust addition to our firm’s Securities team,” said Brattle Interim President & Principal David J. Hutchings. “His testifying experience and ability to help parties understand risk in complex portfolios involving options will be a major asset to Brattle’s clients.”

With more than 15 years of litigation consulting experience at top consultancies, Dr. Roper has served as a testifying expert in several high-profile commercial litigation matters, including as a class action certification expert. He has consulted on matters involving options trading, claims relating to risk management, fixed and variable rate annuities, and more.

Dr. Roper’s consulting experience is supported by a strong background in academia. He has held research and teaching positions focused on corporate finance at the Stanford Law School, the University of Wisconsin-Madison, and Duke University’s Sanford School of Public Policy. His work has been published in several leading economic and financial journals.

“I look forward to continuing to build the Brattle brand in securities litigation,” said Dr. Roper. “With the deep bench of expertise already in place and opportunities to invest going forward, Brattle should be on the top of the short list for clients looking for experienced securities experts that use innovative approaches.”

Before joining Brattle, Dr. Roper founded his own litigation consulting firm Catalyst Economic Consulting, and gained prior experience as an Executive Vice President and a Vice President, respectively, at two global economics consultancies.

To learn more about Dr. Roper, please see his full bio.

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Cryptocurrency tracing – which requires tracing blockchain activity and the internal transactions of crypto businesses – is essential to support creditor asset recovery efforts and clawbacks in cryptocurrency platform bankruptcies such as the ongoing Celsius saga. Mr. Hinton details how tracing methods can differ depending on whether crypto is held on account-based or unspent transaction output (UXTO)-based blockchains, and examines the potential recovery avenues for investors in Celsius’s Custody and Borrow accounts. Such efforts will likely be a test case for investors considering similar actions in other crypto business bankruptcies, including those of FTX, Voyager Digital, and Genesis.

The full article, “How Celsius Customers May Use Tracing to Recover Deposits,” is available below (subscription required).

The post Cryptocurrency Tracing Goes off the Chain: Principal Paul Hinton Discusses How Tracing Crypto Currency Still Requires Traditional Methods in Recent <i>Law360</i> Article appeared first on Brattle.

In a recent article for Law360, Brattle Principal Dr. Christine Polek and Senior Associate Dr. Shastri Sandy explore how the use of AI decision models can cause disparate impact in areas such as housing, employment, credit, and healthcare – and, in turn, violate relevant laws and protections. They discuss some of the red flags regulators and consumer advocacy groups have raised about algorithms’ potential to produce discriminatory results, and provide an overview of statistical, economic, and qualitative tools that can be used to evaluate and address AI-induced disparate impact.

The full article, “Don’t Assume AI is Smart Enough to Avoid Unintended Bias,” is available below.

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The winners of the 2022 Brattle Group Prize in Corporate Finance are:

First Prize, $25,000: Andreas Fuster, Paul Goldsmith-Pinkham, Tarun Ramadorai, and Ansgar Walther
Predictably Unequal? The Effects of Machine Learning on Credit Markets
The Journal of Finance, February 2022

Distinguished Paper, $10,000: Asaf Bernstein
Negative Home Equity and Household Labor Supply
The Journal of Finance, December 2021

Distinguished Paper, $10,000: Isaac Hacamo and Kristoph Kleiner
Forced Entrepreneurs
The Journal of Finance, February 2022

The Brattle Group has funded this annual award for more than 20 years. These prizes are presented at the AFA’s annual meeting, and this year’s awards were announced at the AFA’s Annual Meeting 2023, which took place January 6–8 in New Orleans, LA. All papers published in issues of The Journal of Finance from the first five issues of the given year, and December of the previous year, are eligible. We congratulate the winners on their achievements!

View a complete list of past winners

More about the AFA

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Senior Associate Dr. Nguyet Nguyen compares informed trading in a fair-access dark venue with  restricted-access dark venues in a recent article published in The Quarterly Journal of Finance. Dr. Nguyen found robust evidence of informed trading taking place in the fair-access dark venue, but not in other dark venues.

The full article, “Informed Trading in Dark Pools: Fair-Access Dark Venue vs. Restricted-Access Dark Venues,” is available for download below.

The post Informed Trading in Dark Venues: Dr. Nguyet Nguyen Discusses in a Recent Article in <i>The Quarterly Journal of Finance</i> appeared first on Brattle.

Brattle Principal Paul Hinton has coauthored a recent Bloomberg Law article with former Assistant US Attorney Sid Kamaraju of Pryor Cashman detailing some of the sanctions compliance challenges that both traditional finance and the crypto industry face. The article also identifies the limitations of surveillance strategies centered on list-based screening and examines how past regulatory investigations demonstrate the need for a sophisticated implementation of a risk-based approach to avoid enforcement actions. 

The full article, “Navigating Russia Sanctions Compliance in the Crypto Space,” is available below.

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Liu and the California shell companies he controlled lied to US Customs and Border control to avoid paying anti-dumping and countervailing duties, which had been imposed in 2011 on certain types of extruded aluminum imported from China into the US. Aluminum extrusions were disguised as aluminum pallets, which were never purchased and instead sat stockpiled in warehouses for several years.

In the US Department of Justice’s (DOJ’s) investigation into Liu and the California companies, a Brattle team – led by Principals Torben Voetmann and Mark Sarro and Associate Adrienna Huffman – aided prosecutors in analyzing Perfectus’s stock price reaction in response to certain company activities. At trial, Mr. Voetmann testified about the conglomerate’s IPO prospectus and the related-party disclosures it was compelled to provide to shareholders.

In August 2021, a federal jury found all six of the California companies guilty of conspiracy, wire fraud, and passing false and fraudulent papers through a customhouse. On April 11, 2022, all six entities were sentenced to five years of probation and ordered to pay $1.83 billion in restitution.

View the Case Highlight

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“These talented individuals provide in-depth expertise to a vast array of clients on matters related to financial services, energy, tax, and more,” shared Brattle President & Principal David Sunding. “In addition, they have made exemplary contributions to mentoring and developing their colleagues, and truly demonstrate the exceptional leadership pipeline we are fortunate to have at the firm.”

Our new Principals:

• Hollie Mason | Practice Leader: Broker-Dealers & Financial Services | Chicago
  An attorney with more than 15 years of experience in the financial industry, Ms. Mason provides expert testimony and consulting services concerning securities litigation and enforcement matters. She has deep knowledge of Financial Industry Regulatory Authority (FINRA) and Securities & Exchange Commission (SEC) rules.
• David McKnight | New York
  Mr. McKnight has over 20 years of experience providing expert testimony and consulting services in matters pertaining to mass torts, securities, finance, valuation, and bankruptcy. In mass tort matters, he has worked with liability forecasts, insurance coverage, and discounted cash flows.
• Albert Metz | New York
  Dr. Metz is a securities and finance expert with deep experience in credit analysis, financial modeling, asset pricing, market efficiency, and event studies. He has consulted on asset pricing, antitrust, mergers and acquisitions, market manipulation, collusion, fixed income securities, and various debt derivatives.
• Christine Polek | Boston
  Ms. Polek serves as a consulting and testifying expert in complex litigation requiring the application of economic, financial, and statistical analysis to legal and regulatory issues – with a focus on valuation, tax controversy, and labor and employment.
• Akarsh Sheilendranath | Boston
  Mr. Sheilendranath is an energy economist with a unique blend of expertise in wholesale electricity markets, electric transmission, and regulatory corporate finance. He specializes in transmission policy, utility investment strategy and planning, large-scale renewable integration, and cost-benefit assessments.
• Anul Thapa | Boston
  Mr. Thapa has over 12 years of experience applying economic and finance principles in complex oil and gas-related litigation, arbitration, and regulatory proceedings. His experience in commercial disputes includes damages estimation, valuation, and pricing related to energy assets and contracts.
• Mike Tolleth | New York
  Mr. Tolleth specializes in the economic analysis of energy markets, with expertise in financial modeling and valuation of energy assets, contracts, and businesses. He supports clients in litigation and arbitration matters and provides expert testimony related to cost of service, rate design, cost of capital, regulatory policy, long-run marginal cost pricing, and market power.

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