AACG financial economists and statisticians have assisted counsel and financial service providers as experts in a broad range of areas, including the following:
- AACG economists assisted in damages calculations of allegedly predatory lending practices by payday lenders, including but-for re-allocations of payments to interest and principal and calculations of overpayments.
Securities Class Actions
- AACG economists have worked for the Securities and Exchange Commission, class plaintiffs and defendants in 10b-5 cases. In some cases, AACG economists analyzed the behavior at the heart of the 10b-5 allegation to help determine whether the behavior was inappropriate. In other cases, AACG economists analyzed the potential damages following the alleged behavior, determining what other factors were associated with stock price movements and the flow of trades over the class damages period.
Market and Index Manipulation
- AACG economists analyzed the one-month U.S. Dollar London Interbank Offer Rate (LIBOR) since 1987 to identify signs of manipulation based on a previously published test that has appeared in a peer-reviewed economics journal and been cited in the business press and legal filings of major financial disputes. We found evidence of LIBOR manipulation throughout the years since 1987, suggesting that LIBOR has been consistently manipulated or that the proposed test has no power to distinguish periods of LIBOR manipulation from periods of non-manipulation. The results and other insights were presented in three webinars, see below.
- AACG economists have analyzed market manipulation of options on foreign exchange rates traded in many markets. This work includes an analysis of damages assessed by the court appointed Special Master.
- Economists at AACG have analyzed manipulation in indexed commodity prices. This analysis included both analysis of liability and damages asserted by a class of plaintiffs.
Inappropriate securities trading (front-running, portfolio pumping/window dressing)
- AACG economists have developed monitoring tools and protocols to identify inappropriate trading behavior, such as Front-Running, Portfolio Pumping/Window Dressing and other trading behaviors that suggest an individual portfolio manager, group, or an entire firm is trading inappropriately. We help Hedge Fund and Mutual Fund clients develop tests that fit the regulatory environment and that are rigorous enough to convince investors that they have the right controls in place to protect investments. We have testified for the SEC in this area.
- AACG economists have analyzed the economic mechanisms behind various tax issues including whether there is an economic rationale for various types of options transactions market participants have constructed.
- In several distinct putative class actions, AACG economists testified on issues related to the sale of deferred annuities. Based on so-called suitability forms filled out by prospective applicants, we quantified the objectives of policyholders and demonstrated that favorable financial returns often went hand-in-hand with estate planning, avoidance of investment risks, and peace of mind with respect to financial security in old age.
- The U.S. Department of Labor engaged AACG to study Qualifying Longevity Annuity Contracts (QLACs) and other types of annuity products. Click here for the final report.
- The U.S. Department of Labor commissioned AACG to analyze whether individual investors manage to beat the market by fortuitous timing of purchases and sales of mutual funds. We found that investors, on average, earn lower returns than a buy-and-hold strategy would deliver, and that timing errors were larger for investors who traded with the assistance of brokers. Click here for the final report.
- In numerous engagements, AACG experts have assisted in disputes over reimbursement of medical claims. The issues involved non-payment for out-of-network claims; usual, customary, and reasonable (UCR) reimbursement rates; patient responsibilities (co-payments, deductibles, co-insurance, out-of-pocket maximums); patient payments that exceeded provided charges; alleged upcoding (assignment of high-severity CPT or DRG codes to low-severity cases); patient assessments for Medicare Advantage plans; and many more. Some matters involved manual reviews of a statistical sample of claims; we have both designed/implemented and critiqued such sampling processes.
- In the context of employer-provided (ERISA) health plans, AACG economists have assisted with disputes involving fully insured and self-insured plans.
- AACG economists have assisted the U.S. Secretary of Labor with statutorily required annual reports to Congress on self-insured health plans. See the 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020 and 2021 reports.
Mutual Funds and Hedge Funds
We have developed monitoring tools and protocols to identify inappropriate trading behavior, such as Front-Running, Portfolio Pumping/Window Dressing and other trading behaviors that suggest an individual portfolio manager, group, or an entire firm is trading inappropriately. We help Hedge Fund and Mutual Fund clients develop tests that fit the regulatory environment and that are rigorous enough to convince investors that they have the right controls in place to protect investments.
AACG Economic Consulting’s expertise in this area is built on our experience developing scientifically defensible analyses of trading behavior for clients who want to test and verify the quality of their trade monitoring. We also have related experience in litigation and have testified for the SEC in this area. See our Scientific Fraud Detection page.