Economic experts are increasingly in demand to assist in financial services investigations that pose the risk of criminal prosecution (“white-collar investigations”). Well before considering the need for experts to analyze financial market conduct, fraud claims, and damages, Brattle economists assist legal teams in investigations that are document, financial, and accounting data-intensive to develop the facts and assess the weight of evidence of potential misconduct. We provide clear, detailed analysis to the executives, corporate boards, special committees, investigators, and litigators that retain us to help answer the key questions posed in investigations. We provide consulting expertise from start to finish of an investigation, as well as economic expert testimony and testimony on industry customs and practice in litigation if cases proceed beyond the investigation stage.
Brattle’s experience in white-collar investigations and litigation has included insider trading cases, regulatory enforcement matters involving alleged abusive business practices, market and trading abuses, misconduct by financial market institutions, Foreign Corrupt Practices Act (FCPA) violations, and money laundering. Our clients include major companies, financial institutions, investigative agencies such as the Federal Bureau of Investigations (FBI) and Secret Service, U.S. government regulators such as the Internal Revenue Service (IRS) and the Securities and Exchange Commission (SEC), private law firms, and the U.S. Department of Justice (DOJ).
The specific types of engagements in which we assist in data-intensive investigations and provide expert testimony include:
- False Claims (including Mortgage Programs and Health Insurance)
- Insider Trading and Criminal Financial Schemes
- Investigation and Prosecution of Allegedly Abusive Practices or Trading
- Foreign Corrupt Practices Act (FCPA) Violations
- Bribery and Money Laundering
SEC Administrative Action: Brattle experts conducted a statistical analysis of trading patterns to assess whether particular trades were correlated with instances in which the defendant had access to inside information in the form of advance copies of analyst reports. The types of reports that were expected to have an effect on share price were evaluated with reference to the economic literature on stock price response to different types of disclosures in analyst reports.
U.S. v. Countrywide / BofA. In landmark litigation against a major U.S. financial institution under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), Brattle experts helped to identify and recruit multiple experts and advise counsel on case-specific facts and considerations from inception through trial. We coordinated rigorous review of millions of documents produced and used in discovery, as well as analysis of loan-level data to determine the information known about the quality of the loans in question, management’s actions, the causes of loan defaults, and the extent of resulting damages. We assisted counsel in real-time before and during trial, which ended in a jury verdict favorable for the client on liability and a $1.3 billion damages award.
U.S. v. Deutsche Bank. Brattle experts advised the U.S. DOJ in litigation under the False Claims Act on behalf of the Federal Housing Administration (FHA) and U.S. Department of Housing and Urban Development (HUD). The Government alleged Deutsche Bank managers misrepresented the quality of loans insured through the FHA Direct Endorsement Lender program. We analyzed a range of issues to determine whether the bank knowingly misled HUD about the quality of mortgages, which later defaulted. Our analysis included financial and institutional factors relating to then-current market conditions and banking practices in the mortgage industry. The case settled for over $200 million prior to trial.
Manufacturing Defects Fraud. On behalf of the U.S. DOJ in an ongoing case, we analyzed documents and data relating to a fraud action involving an alleged scheme to defraud the u.S. Department of Defense and other federal agencies by concealing known defects in high-tech military equipment.
Pay to Play Investigation. Brattle experts consulted to the U.S. DOJ and the SEC with document review and analysis regarding a FCPA case involving an alleged multi-million dollar “pay to play” scheme involving a U.S. broker-dealer and a development bank in South America. The former CEO and a Managing Director of the broker-dealer ultimately pled guilty to their roles in a bribery scheme.
Specialty Pharmacy Kickbacks. Brattle experts are currently assisting the U.S. DOJ and private plaintiffs’ counsel in a multi-billion dollar civil fraud suit accusing a pharmaceuticals company of paying illegal kickbacks to specialty pharmacies for recommending the company’s drugs over competing alternatives. We analyzed detailed facts and data to help the trial team determine the extent to which kickbacks defrauded Medicare and Medicaid. We also assisted throughout discovery to identify information and potential witnesses, and to help prepare for witness depositions.
Virtual Currency Networks. Brattle experts are currently assisting the U.S. DOJ and several investigative agencies of the federal government with a highly-complex criminal case in which the defendants are charged with operating a digital currency service that knowingly laundered money for criminal enterprises. We have organized and examined a large volume of seized evidence, identified key facts and information for the investigative and trial teams, and helped prepare material for exhibits. We have also identified testifying experts on related case-specific issues requiring testimony at trial.
Bank Correspondent Accounts. Brattle experts are currently assisting the U.S. DOJ and FBI in an active investigation of potential money laundering in the U.S. by certain foreign banks. We have analyzed transaction data in bank correspondent account records to identify and profile certain characteristics of the transactions in question, including identifying possible omissions, misrepresentations, and/or false paperwork. The investigation may result in criminal charges.
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December 1, 2015
Published in Law360
Big Data’s Big Impact In Financial Investigations
May 28, 2015
Published on Law360