“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

The post American Finance Association Announces 2022 Recipients of The Brattle Group Prizes in Corporate Finance appeared first on Brattle.

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.

SPACs – shell companies created by sponsors who raise funds by selling shares through initial public offerings (IPOs) – skyrocketed in 2021, but the market has cooled in early 2022. SPAC IPOs and initial business combinations (IBCs) have been on a downward trend as of late, while shareholder redemption rates and liquidations are increasing. The authors, citing unfavorable market conditions and increased scrutiny from the US Securities and Exchange Commission (SEC), predict that SPAC-related litigation will rise in the coming years, and share the types of litigation that can be expected from both private and public litigants.

The full article, “Latest SPAC Trends Point To Risk Of Negative Outcomes,” is available below.

View Article

The post Brattle Consultants Author Article on Current SPAC Landscape and Increasing Potential for Securities Litigation appeared first on Brattle.

Real options are investment opportunities that will be exploited in the future if they become sufficiently valuable. The capital expenditure that real-option exercise requires is implicit leverage; it acts like debt because it increases financial risk and because not undertaking investments can be costly.

Real-option leverage does not appear on corporate balance sheets, so observed capital structures of firms that hold real options may provide a distorted view of the debt capacity of the underlying assets.  This implies that estimates of the cost of capital based on observed capital structures of such firms will be biased. And it suggests that capital-structure theories will be difficult to test when real options and hidden leverage are important.

The full article, “Real Options and Hidden Leverage,” can be found below.

The post Hidden Leverage in Real Options: Brattle Consultants Uncover in the <i>Journal of Applied Corporate Finance</i> appeared first on Brattle.

Dr. Goldstein will also continue in his capacity as Professor of Finance at Babson College, where he holds the Donald P. Babson Chair in Applied Investments. He specializes in examining the structure of equity and bond markets and does work in climate change, dividend policy, asset pricing, real estate, and privatization.

We wish Dr. Goldstein all the best in this new role.

The post Brattle Congratulates Academic Advisor Dr. Michael Goldstein on Appointment as Secretary/Treasurer of the Financial Management Association appeared first on Brattle.

“Branko is an asset to our firm’s securities and finance team,” said Brattle President & Principal David L. Sunding. “His deep expertise in issues related to multi-level marketing compensation models, securities fraud investigations, and regulatory actions, will further enhance our ability to provide the clear, independent insights needed to support clients in the ever-changing marketplace.”

Dr. Jovanovic applies his sophisticated econometric expertise to address liability and damages issues in securities class actions and market manipulation matters. He has helped clients respond to formal investigations and requests from regulatory entities like the US Federal Trade Commission, the Securities and Exchange Commission, and the Financial Industry Regulatory Authority, as well as testified on a broad range of matters before federal and state courts, regulators, and arbitral tribunals. In his MLM experience, Dr. Jovanovic has provided analyses on matters related to regulatory investigations, consumer class actions, internal investigations, and compensation model restructuring.

“I’m thrilled to be back at Brattle, where I can continue to provide top-notch consulting and testifying services for my clients,” Dr. Jovanovic said. “I look forward to collaborating with my colleagues, mentoring junior team members, and promoting our firm’s diversity, equity & inclusion efforts.”

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

The post Securities and Finance Expert Dr. Branko Jovanovic Rejoins The Brattle Group as a Principal appeared first on Brattle.