NEWS & RESEARCH

Three experts have joined PF2's team in Australia in late 2023 and early 2024.  We welcome Ross Beaney, Meiring de Villiers and John Feeney to the PF2 team.  

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."

Join PF2's Gene Phillips at the International Bar Association's (IBA) Annual Conference in Miami, running from Oct. 30 - Nov. 4.

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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

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To connect with us at the event, email info@pf2se.com

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."

PF2 consultant Marc Joffe and Professor Jeffrey Rogers Hummel, in an article for the Reason Foundation, review several instances of the US Treasury defaulting in the past.

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.  

Join PF2's Gene Phillips at Omni Bridgeway's Panel Discussion on Data Privacy Litigation, with a focus on Australian and UK developments.

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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

PF2 consultant Marc Joffe wrote for the National Review about missteps in prep-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.

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.

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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.    

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.

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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.

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The event will take place on Sept. 24, 2020 at 10 am Eastern / 3 pm UK Time.  

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.

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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)

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.    

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.

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)

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.

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.

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.

This research paper examines flaws in the implementation of the correlated binomial, and suggests improvements that overcome the existing shortcomings. (Journal of Structured Finance, by subscription)​​

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)​​

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)

This column, published in the Australian Financial Review, examines some of the technological challenges facing Australian banks, in the aftermath of the Royal Commission into Banking Misconduct.

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)​​

We are delighted to announce that PF2 affiliate Joe Pimbley has accepted an appointment as the editor of the distinguished Journal of Derivatives.

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)​​

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.

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. 

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.

GARP Risk Intelligence Publication. "Today, the CBOE’s Volatility Index is prone to inadvertent and deliberate errors. But there are steps we can take to improve the index’s accuracy and curtail its susceptibility to miscues and falsifications." 

PF2 summarizes investigations and disputes in the trading of gold, silver, platinum and palladium contracts. 

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.

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.​ 

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)

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.