Certain abusive trading practices are potentially subject to criminal and civil enforcement. Our experience in major regulatory enforcement cases has involved intensive analysis of quantitative and qualitative data. We have evaluated business conduct in cases involving consumer finance, mortgage finance, securities structuring, alleged benchmark manipulation, equity market collocation practices, commodity and derivative pricing, and foreign exchange rates.
The Brattle Group applies Big Data analytics and knowledge of equities, fixed income, and commodities markets to analyze trading conduct. This includes cases focused on alleged market manipulation, disruptive trading, conflicts of interest over payments for order flow, cross-trading, and other violations of the Investment Company Act of 1940 or disclosure-related fraud claims.
The complexity and distributed structure of financial markets and the increasing availability of detailed high-volume data is changing the scope of market surveillance activities. The Brattle Group investigates trading abuses such as spoofing, including assembling the necessary data and conducting trading-related forensic analysis. We host Big Data in-house to ensure confidentiality and to respond quickly and cost-effectively, providing the answers to key questions that can only be answered through careful review of the data.
Enron’s bankruptcy estate accused Dynegy of breaching a merger contract proposed just prior to Enron’s bankruptcy. Enron alleged Dynegy’s breach was the proximate cause of the bankruptcy. The suit sought several billion dollars in damages. Brattle experts examined alternative causes of the merger failure and the potential for false and misleading information in Enron’s financial statements leading up to and during the final days of the merger negotiations. We were also involved in complex questions of potential accounting fraud and a large variety of complex organizational and financial contracting questions. The case ultimately resulted in a $25 million settlement after discovery.
Brattle experts conducted an independent review of the reports of the Special Committee of the Board of Friendly Ice Cream Company and the Special Committee’s consultants. We evaluated the reliability of the reports’ approaches and findings in response to derivative claims by Friendly’s founder, S. Prestly Blake, regarding actions by Friendly’s Board and its former Chairman and CEO, Donald Smith. Broadly, Mr. Blake’s claims related to the effect of alleged mismanagement of Friendly and misreporting of the company’s performance and market value. The case ultimately resulted in a proxy contest generating $64 million for shareholders and is the subject of a Harvard Business School case study.