HomeWebcastFraud-on-the-Market Theory and Price Impact Rule in Securities Litigation: Hot Buttons for 2019
Online CLE Fraud-on-the-Market Theory CLE

Fraud-on-the-Market Theory and Price Impact Rule in Securities Litigation: Hot Buttons for 2019

Live Webcast Date: Thursday, July 11, 2019 from 12:00 pm to 1:00 pm (ET)
Securities Law (CLE)Recording

Online CLE Fraud-on-the-Market Theory

Join us for this Knowledge Group Online CLE Fraud-on-the-Market Theory Webinar. The recent years have seen the steady rise of securities litigation filings in the U.S. Along with this upward trend is the continuous changes in the securities litigation landscape due to emerging developments, particularly those concerning the fraud-on-the-market theory and price impact rule. One of the cases that will be crucial in 2019 and beyond is the Arkansas Teacher Retirement System v. Goldman Sachs Group Inc. The lawsuit deals with the defendant’s potential rebuttal of the fraud-on-the-market presumption under Halliburton.

Listen as a panel of key thought leaders and practitioners assembled by The Knowledge Group present the audience with an in-depth discussion of the significant fraud-on-the-market and price impact issues this 2019. Speakers will dig deeper as they present recent court rulings, analyze critical trends, and offer practical tips and strategies to successfully win a securities lawsuit.

This Webcast will discuss the following:

  • Fraud-on-the-Market Theory and the Price Impact Rule – Issues for 2019
  • Notable Cases
  • Red Flags
  • Litigation Tips and Strategies
  • What Lies Ahead

Agenda

Cynthia L. Jones, CFA, Vice President
Monument Economics Group
  • Brief discussion of Halliburton II decision June 2014
    • SCOTUS upheld Basic, Inc. v. Levinson class-wide presumption of reliance on integrity of the market price if stock traded in well-developed market
    • FOM Theory postulates that prices reflect all publicly available information, even false information, if the stock trades in an efficient market; no need to demonstrate individual reliance on misleading information
  • What does this mean for Plaintiffs Seeking to Obtain Class Certification and Defendants Seeking to Defeat Class Certification
    • For Plaintiffs:  maintains premise set forth in Basic that only an indirect showing of price impact necessary (i.e. if can show market for stock was efficient, price reflected all information, even misleading information)
    • For Defendants:  provides a tool for defeating class certification with a direct showing that the misleading information did not impact the price of the stock
  • What is the Role of the Economic Expert
    • Expert for Plaintiff opines that the market for the stock was efficient
      • Cammer, Krogman factors
      • Event Study to show cause and effect relationship between new information and changes in price
    • Expert for Defendant opines either that
      • Plaintiffs’ expert did not prove market was efficient; or
      • The alleged misinformation did not affect the stock price (i.e. no price impact)
  • Cases Decided Since Halliburton II and Hot Button Issues
    • In favor of Plaintiffs (i.e. class was certified)
      • Regions Financial, Intuitive Surgical, Goldman Sachs
    • In favor of Defendants (i.e. class certification denied)
      •  Finisar Corp., Best Buy

Shaama Pandya, Principal
Cornerstone Research
  • Elements of Securities Claims under Section 10(b):
    • Brief discussion of three related but distinct concepts:  materiality, loss causation, reliance
    • Fraud-on-the-market and price impact are both issues related to the concept of reliance
  • The Use of Event Studies at the Class Certification Stage of Securities Litigation
    • Used for “cause-and-effect” Cammer factor to support market efficiency opinion; also used to assess price impact (or lack thereof)
    • Overview of the event study methodology:  how does it work?
    • Discussion of the limitations of an event study, i.e., what an event study can and cannot do
  • Case Studies:  Decisions since Halliburton II
    • Best Buy
    • Finisar
    • Moody’s
    • Freddie Mac

Who Should Attend

  • Securities Law Attorneys
  • Business Lawyers
  • General Counsel
  • Investors
  • In-House Counsel
  • Top Level Management
  • Litigators

Online CLE Fraud-on-the-Market Theory

Cynthia L. Jones, CFA, Vice President
Monument Economics Group
  • Brief discussion of Halliburton II decision June 2014
    • SCOTUS upheld Basic, Inc. v. Levinson class-wide presumption of reliance on integrity of the market price if stock traded in well-developed market
    • FOM Theory postulates that prices reflect all publicly available information, even false information, if the stock trades in an efficient market; no need to demonstrate individual reliance on misleading information
  • What does this mean for Plaintiffs Seeking to Obtain Class Certification and Defendants Seeking to Defeat Class Certification
    • For Plaintiffs:  maintains premise set forth in Basic that only an indirect showing of price impact necessary (i.e. if can show market for stock was efficient, price reflected all information, even misleading information)
    • For Defendants:  provides a tool for defeating class certification with a direct showing that the misleading information did not impact the price of the stock
  • What is the Role of the Economic Expert
    • Expert for Plaintiff opines that the market for the stock was efficient
      • Cammer, Krogman factors
      • Event Study to show cause and effect relationship between new information and changes in price
    • Expert for Defendant opines either that
      • Plaintiffs’ expert did not prove market was efficient; or
      • The alleged misinformation did not affect the stock price (i.e. no price impact)
  • Cases Decided Since Halliburton II and Hot Button Issues
    • In favor of Plaintiffs (i.e. class was certified)
      • Regions Financial, Intuitive Surgical, Goldman Sachs
    • In favor of Defendants (i.e. class certification denied)
      •  Finisar Corp., Best Buy

Shaama Pandya, Principal
Cornerstone Research
  • Elements of Securities Claims under Section 10(b):
    • Brief discussion of three related but distinct concepts:  materiality, loss causation, reliance
    • Fraud-on-the-market and price impact are both issues related to the concept of reliance
  • The Use of Event Studies at the Class Certification Stage of Securities Litigation
    • Used for “cause-and-effect” Cammer factor to support market efficiency opinion; also used to assess price impact (or lack thereof)
    • Overview of the event study methodology:  how does it work?
    • Discussion of the limitations of an event study, i.e., what an event study can and cannot do
  • Case Studies:  Decisions since Halliburton II
    • Best Buy
    • Finisar
    • Moody’s
    • Freddie Mac

Online CLE Fraud-on-the-Market Theory

Online CLE Fraud-on-the-Market Theory

Cynthia L. Jones, CFAVice PresidentMonument Economics Group

With more than 20 years of economic consulting expertise, CFA® charterholder Cynthia L. Jones has been engaged in securities, capital markets, and commercial litigation matters including valuation and economic damages.  She provides expert analyses and opinions in areas including actions brought pursuant to Federal and State securities laws; ERISA litigation; complex business and consumer litigation; shareholder oppression; commercial damages; and mergers and acquisition litigation.  She has been qualified in Federal district court to provide opinions concerning class certification matters, including market efficiency, and has structured financial settlements and developed equitable plans of allocation in conjunction with class action settlements and SEC disgorgement proceedings.  She is frequently called upon to quantify stakeholder damages in financial disputes and to assist in matters related to class certification.

Ms. Jones earned a Bachelor’s degree in Economics and Business Management from North Carolina State University and a Master’s of Business Administration in Finance from Rutgers University.

Online CLE Fraud-on-the-Market Theory

Shaama PandyaPrincipalCornerstone Research

Shaama Pandya provides financial and economic analysis on securities and consumer finance matters, including cases involving large datasets. She develops case strategy and goals related to economic issues in consultation with testifying experts and attorneys. Ms. Pandya also manages statistical and econometric analyses in litigation and regulatory matters.


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Online CLE Fraud-on-the-Market Theory

Course Level:
   Intermediate

Advance Preparation:
   Print and review course materials

Method Of Presentation:
   On-demand Webcast

Prerequisite:
   General knowledge of securities litigation

Course Code:
   148031

NY Category of CLE Credit:
   Areas of Professional Practice

Total Credit:
    1.0 CLE

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About the Knowledge Group

The Knowledge Group

The Knowledge Group has been a leading global provider of Continuing Education (CLE, CPE) for over 13 Years. We produce over 450 LIVE webcasts annually and have a catalog of over 4,000 on-demand courses.

About the Knowledge Group

The Knowledge Group

The Knowledge Group has been a leading global provider of Continuing Education (CLE, CPE) for over 13 Years. We produce over 450 LIVE webcasts annually and have a catalog of over 4,000 on-demand courses.

Monument Economics Group is a business and economic consulting firm that provides expert testimony, litigation support, economic analysis, and strategic advisory services to law firms and corporate and government entities in the United States and internationally.

Our team of experts combines academic rigor with real-world industry experience to offer our clients clear, effective, and objective solutions to the complex economic and financial challenges they face. We bring extensive experience and in-depth understanding of industries and markets to bear on issues arising from competition, litigation, regulation, and finance.

Our seasoned economists have testified before state and federal courts, and major international arbitration forums.  We offer expert consulting and testimony in a variety of legal contexts, including:  Antitrust and Competition; Securities and Capital Markets; International Arbitration; Energy; and Healthcare.  Additional information can be obtained from our website: www.megconsulting.com.

Website: Monument Economics Group

Cornerstone Research provides economic and financial consulting and expert testimony in all phases of complex disputes and regulatory investigations. The firm has 700 staff and offices in Boston, Chicago, London, Los Angeles, New York, San Francisco, Silicon Valley, and Washington DC.

Website: https://www.cornerstone.com

With more than 20 years of economic consulting expertise, CFA® charterholder Cynthia L. Jones has been engaged in securities, capital markets, and commercial litigation matters including valuation and economic damages.  She provides expert analyses and opinions in areas including actions brought pursuant to Federal and State securities laws; ERISA litigation; complex business and consumer litigation; shareholder oppression; commercial damages; and mergers and acquisition litigation.  She has been qualified in Federal district court to provide opinions concerning class certification matters, including market efficiency, and has structured financial settlements and developed equitable plans of allocation in conjunction with class action settlements and SEC disgorgement proceedings.  She is frequently called upon to quantify stakeholder damages in financial disputes and to assist in matters related to class certification.

Ms. Jones earned a Bachelor’s degree in Economics and Business Management from North Carolina State University and a Master’s of Business Administration in Finance from Rutgers University.

Shaama Pandya provides financial and economic analysis on securities and consumer finance matters, including cases involving large datasets. She develops case strategy and goals related to economic issues in consultation with testifying experts and attorneys. Ms. Pandya also manages statistical and econometric analyses in litigation and regulatory matters.

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