Securities

We provide a wide range of consulting and testifying services related to securities and securities markets. For securities class actions we have extensive experience with all facets of damages estimation, including market model estimation, event studies, and the estimation and critique of trading models. In complex securities litigation, we have case experience with futures, forwards, options, and warrants in many markets, including stocks, bonds, foreign exchange, and commodities.

Selected Case Experience

RMBS Litigations

Residential Mortgage Backed Securities Litigation

Cambridge Finance Partners is involved in numerous litigations related to issuance of RMBS securities, related underwriting, and subsequent investor losses. These matters are ongoing and involve private and government actions as well as class actions.

Enron Securities Litigation

Consulting Experts in Securities Class Action

In one of the largest securities cases in U.S. history, Cambridge Finance Partners provided consulting services to counsel for a top-10 international bank in addition to assisting a testifying expert. This multi-year litigation, with plaintiffs’ total damages claim nearing $50 billion, involved a wide array of finance and economic research efforts. Typical for a 10b(5) securities case, we conducted a day-by-day event study, constructed trading models in order to replicate and critique plaintiffs’ damages claims, and analyzed financial reports, analysts’ reports, stock, bond, and options trading data, and other public information in order to identify curative disclosure events. We developed indices of industry performance that transformed over time along with the firm’s underlying business segments. We constructed bottom-up measures of enterprise value. In addition to these analyses, we assisted counsel in a multi-defendant coordinated defense effort, and we provided analysis and explanation of several financial structures including securitizations, swaps, derivatives, and other complex structures.

Analysis of Claims Trading Order

Dana Corp. Bankruptcy

In proceedings in U.S. Bankruptcy Court in Manhattan, investor Carl Icahn’s effort to assert greater control over Dana Corp. was based, in part, on how a court-issued trading order impacted the market for the company’s debt. Attorneys for Dana Corp. asked Robert Noah of Cambridge Finance Partners to analyze the impact of a Bankruptcy Court issued claims trading order.¬†Leading up to a scheduled hearing in August, 2006, Dr. Noah analyzed tick-by-tick trading in Dana Corp. bonds both before and after the issued trading order. In addition, he performed the same analysis for several comparable firms that had been through bankruptcy under claims trading orders.¬†An agreement between Icahn’s group and Dana Corp. was reached shortly before the scheduled hearing.

Event Study and Valuation Related to Acquisition

Sprint-Nextel Merger

Cambridge Finance Partners assisted counsel for Sprint-Nextel in a matter related to a contractual obligation to acquire Nextel Partners. The purchase obligation was triggered by the Sprint-Nextel merger, and at issue was the purchase price for shares of Nextel Partners not already owned by Sprint-Nextel. While publicly traded, Nextel Partners’ share price was affected by a price-markup provisions of an existing purchase agreement as well as by expectations of acquisition. Cambridge Finance Partners provided event study analysis related to the share price of Nextel Partners and assisted counsel with determination of the impact of expectations of acquisition and the existing purchase agreement on share price.

Securities Damages Software

Tools for Event Studies and Trading Models

Complex litigation problems often involve large databases of documents and financial information. Our online tools allow us and our clients to study and analyze information from any web browser. For example, for typical 10b-5 securities class actions, our event study tool combines trading market data, alleged damages estimations, market model and trading model results, news and SEC filings, and graphical displays of price and trading volume. All of this information can be searched and is updated instantly as new case documents are processed and entered into our servers.

Event Study

We work with Linux, SQL, Perl, PHP, Apache, Javascript, C, C++, Mathematica, and other programming and systems tools. We tailor solutions to all common computer systems.