NEWS & RESEARCH
Jul 2024
Event | Beverly Hills Bar Assoc. Panel on Scientific Expert Evidence.
Join PF2's Gene Phillips and Bobby Schwartz of Quinn Emanuel Urquhart & Sullivan, co-presenting on the common mistakes economists and scientists make when serving as expert witnesses.
Beverly Hills Bar Association (Litigation Section)
Thursday, July 25, 12:30 pm - 1:30 pm Pacific via ZOOM
Oct 2023
News | Trial Testimony
U.S. v. Samuel Bankman-Fried
PF2 expert Joe Pimbley testified at the heavily-publicized criminal trial of Sam Bankman-Fried, commonly known as "SBF," in the aftermath of the failure of FTX, the cryptocurrency exchange. Several media outlets reported on Joe's testimony. United States of America v. Samuel Bankman-Fried, case 1:22-cr-00673-LAK (SDNY)
Feb 2023
Case Result | United States of America v. Glencore International A.G.
In determining direct causation, the Court stated that the report filed by PF2's expert provided evidence "sufficient to establish that the loss of the $16 Million damages award was a cause-in-fact of the demise of Crusader’s residual business."
Nov 2022
Event | Data-Tech Class Action Panel (IBA)
Join PF2's Gene Phillips at the International Bar Association's (IBA) Annual Conference in Miami, running from Oct. 30 - Nov. 4.
Gene will be speaking on a panel on November 2, hosted by the Class Actions Committee, entitled "Big tech and misuse of personal information – are class actions and regulators just one step too far behind?"
Panel: Wednesday, Nov. 2, 2022 at 11:15 am ET
To connect with us at the event, email info@pf2se.com
Mar 2022
Research | "Great Derivatives Error": Negative Oil Futures Price in April 2020
In his editor's letter for the Journal of Derivatives, PF2 consultant Joe Pimbley describes the negative oil futures price (close-to-expiry May contract for WTI crude oil) on April 20, 2020, as being "a mistake of derivative construction."
Apr 2021
Research | Asset Pricing
In their research paper entitled "Asset prices, midterm elections, and political uncertainty," PF2 consultant Terry Marsh and co-author Kam Fong Chan analyze the statistical and economic significance of midterm congressional elections. The authors compare and contrast US equity premiums, Treasury premiums and real investment growth rates following midterm elections over the past 145 years.
Mar 2021
Event | Data Privacy Litigation Panel
Join PF2's Gene Phillips at Omni Bridgeway's Panel Discussion on Data Privacy Litigation, with a focus on Australian and UK developments.
25 March 2021 at 12:30 AEDT
Gene will be joined on a panel by Michael Bywell, Partner, Hausfeld; Angela Flannery, Partner, Holding Redlich; Prof. John McMillan AO, former Australian Information Commissioner; and Kristen Smith, Investment Manager, Omni Bridgeway
Dec 2020
Research | Echoes of the Great Recession in Commercial Real Estate
PF2 consultant Marc Joffe wrote for the National Review about missteps in pre-pandemic single-asset and single-borrower (SASB) commercial mortgage backed securities (CMBS), the credit ratings of which — arguably inflated to begin with — are being downgraded steadily due to the pandemic, or exacerbated by it. Downgrades occur even at the "AAA" level.
Oct 2020
Event | Litigation Funding
On Oct. 20, PF2 CEO Gene Phillips will be among the speakers at the 3rd Annual LF Dealmakers Forum, a "virtual" event which runs from the 13th of October through the 22nd.
Gene will be joined on a panel — Ask the Experts: Tough Questions in Litigation Finance — by Fred Fabricant, Partner, Fabricant LLP; William Farrell, Managing Director & General Counsel, Longford Capital; Matthew Harrison, Senior Investment Manager, Director of Complex Strategies, Omni Bridgeway; and Lewis LeClair, General Counsel, McKool Smith.
Sep 2020
Research | Legal Team for COVID-era Financial Markets and Products Litigation
This article — published by Westlaw and co-authored with Zachary Mazin and Daniel Hendler of trial law firm McKool Smith — analyses the nature of, and complexities that arise from, crisis-era litigation and details the decisive advantages that come with engaging experienced legal counsel and industry experts when pursuing or defending crisis-era litigation.
Sep 2020
Event | Financial Institutions & Products Litigation in the Wake of the Pandemic
PF2 CEO Gene Phillips is among the speakers at this Bloomberg Intelligence event, where he is joined by Uri Itkin, partner at Kasowitz Benson Torres LLP; Elliott Stein, Senior Litigation Analyst at Bloomberg Intelligence; and John Taylor QC, commercial silk at Fountain Court Chambers.
The panelists discuss existing and potential litigation emanating from the pandemic, including disputes arising from margin calls, the LIBOR transition, and ratings/price inflation in the market for private securities and structured products such as CLOs and CMBS.
The event will take place on Sept. 24, 2020 at 10 am Eastern / 3 pm UK Time.
Aug 2020
Research | CLO Ratings During the Pandemic
This article concerns itself with potential shortcomings in the ratings processes used to provide new-issue and surveillance ratings of collateralized debt obligation (CLO) securities during the coronavirus pandemic.
The authors find the language used by the rating agencies to be hazy. Aside from the lack of transparency as to how ratings are being produced, the authors find that the rating agencies are deviating with some regularity from their published methodologies, and that there are inconsistencies among the deviations themselves.
(Journal of Structured Finance, by subscription)
Aug 2020
Research | Covid-Era Securities Litigation Calls for Experienced Counsel
This article, published by Bloomberg Law, discusses complexities specific to crisis-era shareholder class actions, and the compelling need to engage first-rate litigation counsel and industry experts when litigating cases that emanate from a crisis, like the ongoing Covid-19 pandemic.
Jul 2020
Research | Risk Exposure as an Element of Damages
This article, published by Westlaw, focuses on the important element of risk exposure within the calculation or assessment of damages. The article provides a number of thematic examples, including data breach cases, in which litigators and courts often confine their analyses too narrowly on the tangible consequences of alleged misconduct, even early in the litigation, rather than the immediate risk-based exposures resulting from the misconduct alleged.
Jul 2020
Research | Will the COVID Pandemic Spark a Return in GFC-Type Financial Market Litigation?
In this article we draw parallels between 2008 Financial Crisis-era cases and the types of litigation that can be expected to arise out of financial losses suffered during the COVID-19 pandemic.
(Law and Financial Markets Review, by subscription)
Mar 2020
Research | The Myer Ruling and its Limitations
This article, co-written by Joe Pimbley and PF2 director Gene Phillips, was published in the Commercial Law Quarterly. The paper focuses on the court's ruling in the seminal Myer class action, and in particular issues with the court's assumptions as to how markets operate, how efficiency can be tested or shown, and the reliability of the technical evidence — specifically event study evidence — provided to the court.
Jan 2020
Research | Risk Exposure as an Element of Damages
This article focuses on risk-damages, and in particular the distinguishing of the risk-based component (which risk may yet to have occurred) from other components that might together form damages. As shown in the article, litigators and courts often look too narrowly to the tangible consequences of alleged misconduct, even early in the litigation, rather than the immediate risk-based exposures resulting from the misconduct alleged.
Sep 2019
Research | On Testifying Experts and their Misuse of Models
This article was published in the Commercial Law Quarterly. It describes thematic challenges scientific experts face when building models; pressures and biases they face; regular shortcomings found in their approach to modeling; and, sometimes, experts' over-reliance on the outputs they derive from the modeling process.
Apr 2019
Research | Royal Commission into Banking Misconduct
We discuss the recommendations of the Royal Commission into Banking in Australia, and its admirable restraint in avoiding the temptation to call for more regulation: the 2,300 page U.S. Dodd-Frank Act and its progeny have amply demonstrated the perils of that approach. We identify elements of the banking and advisory market that pose challenges in implementing the positive changes called for in the Commission’s Report, and potential solutions. We offer three favoured candidates for overcoming anticipated resistance to implementation: learning from the technology giants; creating a meaningful enforcement program; and building a regulatory measurement system that enables a broader spectrum of clients to better assess and compare providers’ performance.
(Law and Financial Markets Review, by subscription)
Feb 2019
Case Notes | Lloyd v. Google
This article analyses the London High Court's ruling in a matter entitled Lloyd v. Google, which concerns data markets and online privacy concerns. We have provided a market-based, economic perspective in our commentary, to explain our criticism of the UK High Court's ruling.
Update: The Court of Appeal reversed the High Court's ruling (Oct. 2019)
Nov 2018
Research | Correction Mechanisms Shall Set Us Free
This research piece looks at elements of our financial architecture that seek to reduce the likelihood of a financial downturn, but once it occurs, unintentionally exacerbate it rather than alleviating it. The paper considers both conflicts of interest in the provision of oversight services and structural and contractual concerns that prompt further selling into an already inhospitable market.
(Journal of Structured Finance, by subscription)
Aug 2018
Research | Are ABS Credit Ratings = Free Speech?
This paper tackles the thorny question of whether credit ratings should be entitled to the highest level of protection under the First Amendment, or only a lower level of protection as commercial speech. The answer for structured finance ratings, we conclude, may be different from the answer for corporate ratings.
(Journal of Structured Finance, by subscription)
Jul 2018
Research | Through Thick and Thin, and Changing Data
This piece examines the powerful influence of prior predictions and estimates on corporate disclosure. We explore the innate psychological pressure on executives to meet (or beat) targets, and how these pressures can culminate in problematic decision-making, especially when economic conditions deteriorate in a way that threatens what may already be optimistic projections.
Jul 2018
Research | Journal of Risk
BV–VPIN: Measuring the impact of order flow toxicity and liquidity on international equity markets. High levels of order flow toxicity can culminate in market makers providing liquidity at a loss or in the suboptimal execution of trades. From a regulatory perspective, high levels of toxicity can be harmful to overall market liquidity and precede precipitous drops in asset prices. The authors acknowledge the resources and technical support provided by the research team at PF2.
Jul 2018
Submission | Australian Law Reform Commission (ALRC)
The ALRC sought submissions regarding its proposals to (1) allow law firms to enter contingency arrangements, and (2) regulate litigation funders. Our submission concentrated on the market dynamics in a competitive funding market, and recommended ways in which the proposed regulation of funders can be more effective.
Jul 2017
Primer | Raise High The Price: An Investigation of Pricing Investigations
Our piece explores the issues at hand. In so doing, we briefly describe the capacity and motivation for adjusting or steering the prices of financial products, and then provide timely examples of cases in which the approaches taken by firms are either being scrutinized or have been found to be in violation of acceptable standards and practices.
May 2017
Primer | Spoofing: Now You See It ... Now You Don't
Financial markets regulations in the U.S. seek to prohibit market activities or transactions that cause false or fictitious prices to be reported as if they truly reflected market levels. Spoofing is one area of market activity that recently garnered the attention of regulatory and supervisory authorities. The highest-profile of the enforcement actions was taken earlier this year, with the CFTC fining Citigroup $25 million for spoofing in the U.S. Treasury Futures market.
Apr 2017
Research | An Examination of Post-Crisis Financial Markets Litigation
This paper details the themes among financial markets cases brought concerning post-crisis issues, including benchmark cases, valuation concerns, trade execution, allocation and fee investigations, and disputes involving other trading and sales practices.
(Journal of Structured Finance, by subscription)
Jan 2017
Primer | FX Litigation Roundup
The piece summarizes the core areas of investigation into misconduct in the currency markets. We describe investigations and litigation across various forms of ForEx trading, spanning benchmark manipulation, collusion to widen bid/offer spreads, front-running, stop-loss triggering, backing away from quotes, and suboptimal execution.