Chris Feige

Analysis Group was retained by counsel for Twitter in its widely publicized litigation against Elon Musk and his companies in connection with his $44 billion acquisition of Twitter.

Analysis Group was retained by Debevoise & Plimpton on behalf of its client, Gramercy Funds Management LLC, the claimant in an international arbitration brought against the Republic of Peru. Analysis Group assisted its affiliated expert Professor Sebastian Edwards, who provided testimony on the bond valuation methodology that was at the heart of Gramercy’s successful claim against Peru.

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A key economic question in securities litigation is how to determine the amount of harm that can be attributed to alleged misstatements and that may be considered as damages. Securities litigation and the legal frameworks around the determination of damages have been developing in different jurisdictions in Europe over the past ten years.

This white paper provides a brief overview of the classical approach to determining damages that is prevalent in many European jurisdictions; describes the alternative framework called ‘Fraud on the Market’ that has been commonly accepted in US courts; summarizes the evolving state of legal frameworks in some of the leading European jurisdictions; and explains the economics and practicalities of calculating inflation damages.

In their article in the October 2022 issue of Antitrust Report, Analysis Group authors explore differences in the roles of economic experts in antitrust criminal litigation under the per se standard – compared to civil litigation under the rule-of-reason standard – involving allegations of price-fixing, bid rigging, or market allocation. After noting an increase in antitrust criminal enforcement activity, the authors – Manager Solvejg Wewel; Managing Principal Samuel Weglein; Vice Presidents David Toniatti and David Smith; and Principal Chris Feige – examine the expert discovery process in criminal litigation relative to civil litigation. Using examples from three recent price-fixing cases – US v. Richard Usher, et al.; US v. Akshay Aiyer; and US v. Christopher Lischewski – they explore the ways in which economic experts’ work impacted, for example, the development of legal strategy.

The authors then address the potential contributions of economic experts – in particular, providing context, presenting evidence of certain economic conduct, and opening the door to alternative explanations for evidence – to discovery, even in criminal antitrust matters in which the per se standard, rather than the rule-of-reason standard, is applied. They conclude by acknowledging the disparate nature of pre-trial rulings and the different requirements for presentation of economic analyses in the two types of cases.

An Analysis Group team supported Cahill Gordon & Reindel LLP and its client Credit Suisse in their successful defense in a long-running antitrust class action over alleged manipulation of foreign exchange currency markets.

As the government’s approach to criminal antitrust investigations has evolved, the potential role of the economic expert in such matters has grown, according to an Analysis Group article in The Exchange: Insurance and Financial Services Development, a newsletter of the American Bar Association Section of Antitrust Law. In the article, “Criminal Antitrust: The Discovery Process and the Role of Economic Experts,” Managing Principal Samuel Weglein, Principal Chris Feige, Vice President David Smith, and Manager Solvejg Wewel draw on their experience in both civil and criminal antitrust cases, the latter of which include US v. Richard Usher, et al. and US v. Akshay Aiyer. The authors examine the expert discovery process in criminal antitrust litigation relative to civil antitrust litigation, and then discuss how economic experts may offer valuable opinions even in a per se environment – that is, one focused on the existence rather than the effect of an alleged conspiracy.

Following years of negotiation, Steinhoff International Holdings N.V., received approval from courts in the Netherlands and South Africa for a €1.7 billion global settlement with shareholders and creditors. Claimants had filed multiple class and group actions, including the first-ever investor class action in South Africa, alleging that Steinhoff had overstated its assets, issued false and misleading statements, and failed to disclose material information regarding its financial performance and prospects. An Analysis Group team led by Principal Chris Feige and Vice President Hadrien Vasdeboncoeur acted as independent economic advisor to Steinhoff throughout the settlement process and provided economic evidence to the Dutch and South African courts in support of the settlement.

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Analysis Group was retained on behalf of Richard Usher, Christopher Ashton, and Rohan Ramchandani, three London-based foreign exchange (FX) traders accused by the US Department of Justice Antitrust Division of violating the Sherman Act by colluding in the Euro-US dollar currency pair.

Analysis Group was retained on behalf of Rohan Ramchandani and Richard Usher, former foreign exchange (FX) traders at Citibank and JPMorgan Chase, respectively, both accused by the US Department of the Treasury’s Office of the Comptroller of Currency (OCC) of cartel conduct in the FX market through a Bloomberg chatroom.

Since the early 2010s, investigators and antitrust regulators have focused on communications among market-making traders in online chatrooms as part of criminal and civil investigations. Traders have often used these forums to post quotes, negotiate trades, and share market information, and competition authorities have cited materials from these chats as evidence to support claims of anticompetitive conduct. But because transcripts of these communications can run into the millions of pages, it is often prohibitively difficult to analyze them and extract the relevant content manually.

Recently, however, powerful data science methods – in particular, machine learning (ML) and natural language processing (NLP) algorithms – have emerged; these algorithms can process vast quantities of text and identify complex linguistic patterns in order to obtain pertinent information without sacrificing analytical precision. In the article “Lessons from recent banking litigation, four Analysis Group consultants – Managing Principal Samuel Weglein, Principal Chris Feige, Vice Presidents Hadrien Vasdeboncoeur and Ilona Mostipan – explain these new tools and describe in detail the ways in which they can help identify relevant evidence with greater precision than has previously been the case. Using blinded examples from recent litigation, the authors offer guidance for using these NLP and ML algorithms, as well as practical steps for organizing, structuring, and analyzing large datasets.

“Lessons from recent banking litigation” is published on Westlaw Today, as well as in Westlaw Journal Derivatives, Westlaw Journal Antitrust, and Westlaw Journal Computer & Internet.

In a decision in the appraisal dispute over the fair value of SWS Group, the Delaware Chancery Court found in favor of Analysis Group client Hilltop Holdings Inc., which acquired bank holding company SWS Group on January 1, 2015 in a $350 million deal. After the acquisition, several shareholder groups petitioned the Chancery Court to determine the fair value of SWS Group, arguing that its stock should have been valued at $9.61 per share, nearly 40 percent higher than the deal price of $6.92.

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The American Bankruptcy Institute (ABI) Commission to Study the Reform of Chapter 11 recently undertook a lengthy study to identify ways to improve the process of reorganization. The commission's final report and recommendations made proposals regarding different facets of the chapter 11 process. A recent AIRA Journal article, authored by Principal Chris Feige and Konstantin Danilov, focuses on one of these proposals, the so-called "redemption option."

In " The Redemption Option: Discussion and Valuation Considerations from the ABI Commission's Proposed Chapter 11 Reform " (Vol. 29, No. 4, 2015), the authors describe the rationale behind the proposal and the technical aspects of its application in practice. "The redemption option is a proposal intended to correct potential unfairness resulting from the valuation of a reorganized company on one particular date during chapter 11 proceedings. Because a reorganized firm's value is often crystallized during a downturn in the economy, senior creditors often get the majority of the equity in the reorganized firm, and therefore capture the firm's future upside, while junior creditors and equity holders receive nothing," the authors explain. The junior stakeholders "therefore have an incentive to delay the confirmation of the reorganization plan, in hopes that the reorganization value increases, and they can negotiate to receive some value. The redemption option seeks to remedy this by paying junior creditors for the potential future upside they forgo when they accept the reorganization valuation as of a certain date."

The authors also describe the step-by-step calculation of the residual option value using a real-world example. They note that although the use of "call option framework to model the value of the implicit option held by junior creditors is a valid approach," the calculation of the value "is heavily dependent on assumptions about volatility." The authors conclude that there will likely be significant disagreement between opposing stakeholders regarding the valuation of the residual option, which will likely necessitate expert input and may result in additional litigation.