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Finance practice offers economic seminar series for lawyers


Bates White is offering a new series of training seminars for attorneys on finance-related topics. Experts in our firm will deliver presentations that are designed to share practical skills for dealing with financial concepts and expert economic testimony. The sessions are geared for both litigation and regulatory settings. Bates White is offering to host these sessions on-site at various client offices and can tailor them to fit firm-specific needs or interests.

The presentations are appropriate for attorneys at all levels, including senior attorneys who have worked with economic experts in prior matters. We can offer sessions related to timely topics in the news, drawing on our experience and insight from recent work. Such topics could include:

Other potential topics include:

  • Introduction to finance for lawyers
  • Financial concepts in litigation and regulatory settings
  • Discount rates and the cost of capital
  • Use of sampling in litigation
  • Structured products

For more information or to schedule a presentation for your firm, contact Bates White Partner Karl Snow by email or at 202.747.1135.

Areas of expertise and case work

The globalization of financial markets in recent decades has created a variety of complex financial instruments and transactions. This complexity, combined with an increasing level of integration between financial markets, has given rise to high-stakes litigation involving intricate details and large sums of money. The recent financial crisis has also resulted in increased government scrutiny of financial markets and instruments, adding to the overall analytical burden associated with such litigation.

At Bates White, we have worked on many high-stakes finance-related cases, and we continue to leverage that experience across a wide range of related matters. We bring the same level of sophistication, industry knowledge and attention to detail to each of our cases, including managing and analyzing large and complex financial databases.

Market manipulation

Increasingly sophisticated financial tools, combined with a higher level of government scrutiny, have made detection of financial irregularities in markets a growing area of importance. Bates White has supported clients in multiple large cases of alleged collusion, manipulation, fraud, and other allegedly illegal trading practices in securities, derivatives, and commodity markets. We have assessed economic theories of harm to competition, trading data, methods of manipulation, empirical evidence, potential sources of damages, and the price impact of the alleged conduct. We have also analyzed high-frequency trading to detect market manipulation.

Cases of alleged manipulation and collusion in financial and commodity markets

  • Bates White has supported plaintiffs in multiple large cases of alleged collusion and manipulation in financial markets.  We have assessed economic theories of harm to competition, assessed potential manipulative schemes, assessed trading data, and generated preliminary damage estimates.
  • Bates White has assessed economic theories of harm, methods of manipulation, empirical evidence, and potential sources of damages in a case of alleged manipulation and collusion in commodity markets.
  • Bates White analyzed the valuation of a portfolio of illiquid options and assessed issues related to liability in a case involving options trading. 
  • Bates White provided advice and analysis for a securities exchange regarding surveillance of high-frequency trading for detection of market manipulation.

FERC v. Amaranth Advisors, Docket No. IN07-26-000

  • Dr. Kathleen King provided expert testimony in FERC proceedings in a major NYMEX price manipulation case. She analyzed price movements and trading behavior, as well as the impact of supply and demand factors.
  • Analyzed NYMEX prices on the at-issue days and found economically and statistically significant price movements that were consistent with the manipulative scheme alleged by FERC.
  • In response to claims by Defendants, examined Amaranth’s trading behavior during the at-issue time periods and found it to be unusual when compared with the behavior of other market participants and Amaranth’s historical behavior.
  • Examined news events and fundamental supply and demand factors, and found no evidence that these factors caused the at-issue price movements.

CFTC v. Parnon Energy Inc., et al., Case No. 11-cv-3543 (SDNY)

  • Dr. King was retained by the CFTC as a testifying expert in a case involving alleged manipulation of crude oil calendar spreads. She analyzed whether NYMEX Light Sweet Crude Oil Futures Contract calendar spread prices were artificial on specified dates, the degree of artificiality, and whether Defendants’ actions were a proximate cause of the artificiality.

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Residential Mortgage-Backed Securities (RMBS)

Since the financial crisis, Bates White has been helping clients  that have found themselves mired in increasingly complex litigation related to mortgage-backed securities understand the value of their claims. We have deep expertise on loan level data, including closing tapes and monthly servicing reports, as well as deal level information, including waterfalls, trustee reports, and deal documents. Our professionals have worked for investors, monoline insurers, and for government entities on both fraud and representations and warranties cases.

Representations and warranties cases for monoline insurers

  • In the matter Financial Guaranty Insurance Company (FGIC) v. Countrywide Home Loans, a dispute with a mortgage originator concerning its underwriting process for loans that were used to create residential mortgage-backed securities (RMBS), Mr. Matthew Long submitted two expert reports on behalf of FGIC and was deposed. Mr. Long developed regression analysis to estimate the impact of underwriting quality and loan defects on the performance of mortgage loans collateralizing the RMBS structures and found that breaching loans were statistically more likely to default than loans that were properly underwritten.
  • In the matter Financial Guaranty Insurance Company (FGIC) v. Countrywide Home Loans, Dr. Karl Snow selected a statistical sample of loans for reunderwriting from the at-issue RMBS. Based on the results of the reunderwriting of the sample, Dr. Snow then estimated the sample breach rate.
  • In multiple other RMBS cases brought by monoline, Dr. Snow provided expert testimony on the damages caused to the insurer by the failure of the deal originator to repurchase loans per the contract. Dr. Snow constructed the waterfalls for the relevant deals and examined the insurer outcomes if the breaching loans had been repurchased. In order to account for the sampling variation, Dr. Snow used a monte carlo analysis.

Consulting services related to RMBS litigation

  • On behalf of a large private RMBS investor, Mr. Long analyzed a portfolio of more than 30 RMBS investments and developed causation analysis and damages methodologies. Mr. Long advised counsel on economic implications of various structural features of RMBS waterfalls.
  • Dr. Snow provided consulting services to a government agency involved in a litigation matter related to the sales of mortgage loans to GSEs. Provided consulting advice on sampling framework, re-underwriting data, and economic damages.
  • Dr. Snow and Mr. Long provided pre-litigation consulting services to a monoline insurer on the sampling of mortgage loans in a matter involving over 40 RMBS securitizations. Devised sample framework to minimize the number of required loan reviews by stratifying on product, documentation type, and other dimensions.
  • On behalf of a large private RMBS investor, Mr. Long analyzed a portfolio of more than 200 RMBS investments, and advised counsel on sampling methodology, loan review protocols, causation analysis, and damages methodologies.

Additional sampling work

  • Dr. Snow submitted an expert report in state court on statistical analysis to calculate the fraction of mortgage loans in various securitized pools that failed to meet the originator’s stated guidelines and/or breached representations and warranties. Designed stratified sampling framework and extrapolated defect rates to various populations of loans.
  • Dr. Snow provided consulting services to a government agency involved in a litigation matter related to the sales of mortgage loans to GSEs. Provided consulting advice on sampling framework, re-underwriting data, and economic damages.
  • Dr. Snow and Mr. Long provided pre-litigation consulting services to a monoline insurer on the sampling of mortgage loans in a matter involving over 40 RMBS securitizations. Devised sample framework to minimize the number of required loan reviews by stratifying on product, documentation type, and other dimensions.

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Financial fraud

Our experts have worked on numerous high profile financial fraud and breach of contract cases analyzing issues of foreseeability, causation, materiality, damages, and apportionment. Our case work has involved allegations of aiding and abetting, breach of contract, misrepresentation, and fraudulent inducement. We have developed financial and econometric models to quantify the impact of alleged accounting and financial fraud to assess and apportion associated damages. We also have estimated damages and evaluated damage claims resulting from alleged breaches of contract in complex litigation cases. Our engagement work integrates key causal mechanisms, valid measures of harm, and defendable apportionment concepts into a cohesive framework to assist in the successful resolution of high-stakes, complex litigation.

  • Dr. B. Douglas Bernheim provided written, deposition, and trial testimony on behalf of Adelphia Recovery Trust in Adelphia Communications Corporation v. Motorola, a lawsuit alleging that Motorola aided and abetted Adelphia in Adelphia’s breach of fiduciary duties and in its perpetuation of a massive financial fraud on Adelphia’s investors.
  • On behalf of the unsecured creditors committee of the Enron estate in Enron Creditors Recovery Corp. v. Citigroup, Dr. Bernheim submitted expert report and provided deposition testimony to quantify the impact of alleged accounting fraud on a bankrupt energy company’s credit rating and assess damages attributable to defendants’ aiding and abetting a breach of fiduciary duty by company insiders. For more information, read the case study.

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