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Further, they elaborate on the real-world legal outcomes and reactions from the courts, and offer a straightforward look at how courts today are viewing price impact after the decision. For more on this topic, the research referenced in this episode is available here and here.

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In a recent Law360 article on the use of event studies in securities class actions, Principal David McKnight and Senior Associate Dr. Ryan Leary use market data surrounding the COVID-19 pandemic to show that the event study methodology can lead to both false positives (during periods of increased market volatility) and false negatives (when market volatility is decreasing). The authors also discuss methods that could be employed to improve the accuracy of event studies in periods of changing market volatility.

The full article, “Ensuring Event Study Accuracy for Securities Class Actions,” is available below.

View Article

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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.

The post Financial Economist Andrew Roper Joins The Brattle Group as Principal appeared first on Brattle.

The authors cite several securities class actions arising from short-sellers’ reports to illustrate the complex and multi-faceted inquiry needed to establish loss causation in these cases. It is important to consider the counterfactual disclosures (i.e., what could have been disclosed) in the context of the actual disclosures (i.e., what was actually disclosed). The authors discuss the existing guidance from the courts as well as academic evidence, which suggest that experts and counsels might need to consider confounding factors beyond disclosures unrelated to the alleged frauds. In certain circumstances, the manner in which the alleged corrective information is disseminated, including the tone of the language, the presentation of the facts and the associated “media impact”, might need to be carefully analyzed.

The full article, “Counterfactuals in Securities Class Actions: An Illustration Using Third-Party Corrective Disclosures,” is available for download below.

The post Brattle Consultants Discuss the Loss Causation Analysis in Securities Class Actions Stemming from Short-Sellers’ Reports in Recent Article appeared first on Brattle.

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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In September 2014, an investor agreed to purchase 2,900,000 shares in 6D Acquisitions, a special purpose vehicle formed for investing in digital marketing/technology company 6D Global Technologies. After entering the agreement but before the investor received his shares, two reverse stock splits occurred to preserve the stock price of 6D Global Technologies and allow it to remain listed on NASDAQ. As a result, the investor received 6.9 times fewer shares than purchased when the official offering closed. He then sued 6D Global Technologies, 6D Acquisitions, and Tejune Kang, alleging that they had breached the subscription agreement and violated Rule 10b-5.

To determine the value of the shares he purchased but did not receive, the investor used simple arithmetic calculations to demand $19.6 million in damages. Principal Paul Hinton testified as an expert witness at the virtual trial that, due to the fragile nature of 6D Global Technologies, no simple rule of thumb could be applied to establish valuation in this instance.

Following the March 2021 trial, District Judge Lorna G. Schofield determined that, though the subscription agreement had been breached, Mr. Hinton’s trial testimony helped demonstrate that no simple valuation could determine the investment’s but-for value due to the fragile nature of 6D Global Technologies. In November 2022, the Second Circuit affirmed the lower district court decision, upholding the damages amount and rejecting the plaintiff’s assertion that the district court had erred in admitting Mr. Hinton’s expert testimony.

Read the full case highlight here.

The post $1 Damages Award Upheld by Second Circuit in 6D Technologies 10b-5 Stock Valuation Matter appeared first on Brattle.

Senior Associate Dr. Chi Cheng and Associate Hannah Rose Schonwald will join a panel to discuss the potential implications and issues surrounding the US Securities and Exchange Commission’s (SEC’s) proposed climate disclosure rules. They will also share tips and strategies that would help companies stay on track and aid the shifting regulatory paradigm.

Register or learn more

The post The Potential Impact of the SEC’s Proposed Climate Disclosure Rules: Brattle Consultants to Discuss in CLE Webcast appeared first on Brattle.

Senior Associate Dr. Adrienna Huffman will join a lunch discussion to explore the current state of equity compensation in unicorn startups. The panelists will discuss the challenges of incentivizing employees in a period of economic uncertainty, new tools and business models for meeting those challenges, and potential litigation risks associated with stock options and other forms of equity compensation. The discussion is a part of the joint Brattle-UC Hastings Law Research project The Unicorn Initiative.

Register and learn more

The post The Current State of Equity Compensation in Unicorn Startups: Dr. Adrienna Huffman to Discuss at UC Hastings Law Event appeared first on Brattle.