Fox Team Disqualifies Market Efficiency Experts and Defeats Class Certification in U.S.-Listed Chinese Company Class ActionAugust 6, 2014 – Press Releases
Fox’s litigation team recently shut down a securities class action brought by the shareholders of China Integrated Energy, Inc., one of a number of China-based reverse merger companies that was attacked by short-sellers in 2011.
The team—Peter Buckley and Joshua Horn—argued that the plaintiffs’ two market efficiency experts should be disqualified and that, without their testimony, the plaintiffs could not establish the prerequisites for class treatment. Judge Beverly Reid O’Connell of the United States District Court for the Central District of California agreed, disqualifying one expert on qualifications and the other because of an unreliable event study methodology.
According to Buckley, “The decision is an important one and emphasizes the significance of the expert’s own experience with event studies as a test for market efficiency and the need to avoid subjective bias in selection criteria.”
The Fox team was assisted by Dr. Andrew Roper of Compass Lexecon in Silicon Valley.