Securities and Finance

ARG financial economists and statisticians provide insights in securities disputes and investigations covering a broad spectrum of issues. Our experts have prepared numerous stock price event studies for various purposes including calculating insider gains from alleged management stock manipulation. We have developed a proprietary model to estimate damages in class action securities cases. The model includes a simulation for the number of damaged shares based on alternative financial trading models.

ARG economists have analyzed mutual funds, variable annuities, and trading desk databases to assist outside counsel and their clients respond to government investigations and civil class actions. Our in-house experts and academic affiliates have presented analytical findings in federal and international courts as well as before the Securities and Exchange Commission and the New York Office of Attorney General as part of settlement negotiations.

Securities: Class Actions

Representative Engagements

  • On behalf of outside counsel of a CEO facing a derivative class action alleging insider trading, ARG economists estimated the expected impact of an earnings announcement on company stock price. We also analyzed historical revenue patterns to help assess the reasonableness of executive statements that the company was on target to meet its earnings guidance. ARG financial economists conducted an event study analysis to quantify the effect of various factors contributing to a statistically significant stock price drop.
  • Related to a 10b-5 case in the health care industry, ARG financial economists designed and estimated an event history analysis to establish that plaintiffs’ damages calculations were overstated. The case settled after our expert’s report detailing our findings was filed.

Securities: Regulatory Investigation

Representative Engagements

  • For an investment bank facing class actions and under investigation by the NASD and SEC regarding its handling of certain initial public offerings, ARG financial economists examined underwriting practices, prices and trading behavior to determine whether there was any empirical evidence of laddering and/or kickbacks.
  • In response to an SEC investigation, ARG financial economists were retained by counsel of a mortgage broker to investigate trading data for evidence of front-running or improper implementation of side-by-side trading procedures.