Research Center Events
Ross Roundtable Discusses Securities Litigation in 2014
—
...investors are happy with their portfolios in bull markets, then suddenly become unhappy when their portfolios go down in a bear market. --Angela Turiano
Academics, practitioners and policymakers gathered at NYU Stern on April 7 for a roundtable discussion on “Getting Personal With Securities Litigation in 2014,” co-hosted by the Vincent C. Ross Institute of Accounting Research and NERA Economic Consulting. Industry experts discussed the recent focus of securities litigation on actions by individuals, including allegations of insider trading and claims of improper recommendations by brokers, and they presented analysis based on their work in the recent Mark Cuban insider trading case.
Erin McHugh, Senior Consultant in NERA’s Securities and Finance practice, presented data on customer-broker disputes, noting that higher levels of dispute filings have been observed during economic downturns.
David Meyer, founding principal of Meyer Wilson, described his experiences representing individual investors and provided his explanation for why the number of customer-broker disputes rises during downturns: “I equate it to high and low tides. When the tide goes out – when the market goes down – all the bad things get exposed. The bull market covers up a lot of the losses related to broker misconduct.”
Angela Turiano of Bressler, Amery & Ross, P.C., who specializes in the representation of brokerage firms and individual brokers, argued, “It’s not that the bull market covers up misconduct,” but rather that “investors are happy with their portfolios in bull markets, then suddenly become unhappy when their portfolios go down in a bear market.” Additionally, she said that “bull markets enable claimants’ lawyers to get creative.”
Christopher Clark, partner at Latham & Watkins, explained the conditions that are necessary for brokers to be found guilty of insider trading and discussed why Mark Cuban was found not to meet the criteria.
Patrick Conroy, who served on a NERA team that provided economic analysis on the Mark Cuban case, shared additional insights from the case.
Lindsay Tomenson, associate general counsel at Citigroup, explained that her team works to ensure that Citigroup has the right policies and procedures in place to prevent communications that could lead to insider leading.
Erin McHugh, Senior Consultant in NERA’s Securities and Finance practice, presented data on customer-broker disputes, noting that higher levels of dispute filings have been observed during economic downturns.David Meyer, founding principal of Meyer Wilson, described his experiences representing individual investors and provided his explanation for why the number of customer-broker disputes rises during downturns: “I equate it to high and low tides. When the tide goes out – when the market goes down – all the bad things get exposed. The bull market covers up a lot of the losses related to broker misconduct.”Angela Turiano of Bressler, Amery & Ross, P.C., who specializes in the representation of brokerage firms and individual brokers, argued, “It’s not that the bull market covers up misconduct,” but rather that “investors are happy with their portfolios in bull markets, then suddenly become unhappy when their portfolios go down in a bear market.” Additionally, she said that “bull markets enable claimants’ lawyers to get creative.”Christopher Clark, partner at Latham & Watkins, explained the conditions that are necessary for brokers to be found guilty of insider trading and discussed why Mark Cuban was found not to meet the criteria. Patrick Conroy, who served on a NERA team that provided economic analysis on the Mark Cuban case, shared additional insights from the case.Lindsay Tomenson, associate general counsel at Citigroup, explained that her team works to ensure that Citigroup has the right policies and procedures in place to prevent communications that could lead to insider leading.