Deposition of Daniel R. Fischel — In re January 2021 Short Squeeze Trading Litigation (Dkt. 582-2, S.D. Fla.)
Summary
Exhibit 1 (Document 582-2) in In re January 2021 Short Squeeze Trading Litigation, Case No. 21-2989-MDL-ALTONAGA (Case 1:21-md-02989-CMA), in the U.S. District Court for the Southern District of Florida, entered on the FLSD docket June 21, 2023: a 115-page transcript of the deposition of Daniel R. Fischel, taken by Plaintiffs on April 12, 2023 at 10:11 a.m. at the offices of Cravath, Swaine & Moore LLP in New York, New York before Wayne Hock, a Notary Public of the State of New York, produced by Veritext Legal Solutions. Laurence Rosen of The Rosen Law Firm examines for Plaintiffs, with Kevin J. Orsini and Charlotte Lepic of Cravath, Swaine & Moore LLP appearing for Defendants. Fischel testifies to being a professor of law and business emeritus at the University of Chicago Law School and that Compass Lexecon takes up the time devoted to professional activities.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
- Date
- 2023-04-12
Cite this document
“Deposition of Daniel R. Fischel (Dkt. 582-2).”
Original at archive.org, dated 2023-04-12. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2023-04-12-covid-era-misc/
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Case 1:21-md-02989-CMA Document 582-2 Entered on FLSD Docket 06/21/2023 Page 1 of
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1
2 UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
3 _________________________________________
4 In re:
5 JANUARY 2021 SHORT SQUEEZE TRADING
6 LITIGATION
7
8 Case No. 21-2989-MDL-ALTONAGA
9 _________________________________________
10 April 12, 2023
10:11 a.m.
11
12
13
14 DEPOSITION of DANIEL R. FISCHEL,
15 taken by Plaintiffs, pursuant to Notice,
16 held at the offices of CRAVATH, SWAINE &
17 MOORE LLP, 825 Eighth Avenue, New York,
18 New York before Wayne Hock, a Notary
19 Public of the State of New York.
20
21
22
23
24
25
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1 1 D. R. Fischel
2 A P P E A R A N C E S:
3
2 of the firm.
THE ROSEN LAW FIRM 3 Q. And what's your role at the
4 Attorneys for Plaintiffs 4 university of Chicago?
275 Madison Avenue 5 A. I'm currently the Lee and Brena
5 New York, New York 10016
BY: LAURENCE ROSEN, ESQ. 6 professor of law and business emeritus at
6 lrosen@rosenlegal.com 7 the University of Chicago Law School.
7 8 Q. Are you still teaching there?
8 CRAVATH, SWAINE & MOORE LLP
Attorneys for Defendants
9 A. Well, it's sort at my
9 825 Eighth Avenue 10 discretion. But in the last couple of
New York, New York 10019 11 years I haven't, although they always ask
10 BY: KEVIN J. ORSINI, ESQ. 12 me to, because I've just gotten too busy.
korsini@cravath.com
11 CHARLOTTE LEPIC, ESQ.
13 Q. So you spend most of your time
clepic@cravath.com 14 running Lexecon or Compass Lexecon?
12 15 A. I wouldn't say running, but I
13 * * *
16 would say, for all practical purposes,
14
15 17 Compass Lexecon really takes up my entire
16 18 time devoted to professional activities.
17 19 Q. And are you -- I assume you're
18
19
20 not -- you didn't take any medication or
20 21 anything, you don't have any medical
21 22 conditions that would interfere with your
22 23 cognition or memory or ability to testify
23
24 24 today?
25 25 A. No, correct.
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2 D A N I E L R. F I S C H E L, having 2 Q. So you are a lawyer?
3 been first duly sworn by a 3 A. Trained lawyer, not a practicing
4 Notary Public of the State of 4 lawyer.
5 New York, upon being examined, 5 Q. Are you admitted to any Bars,
6 testified as follows: 6 state Bars?
7 EXAMINATION BY 7 A. I was. I haven't had any
8 MR. ROSEN: 8 connection to law practice since I think
9 Q. What is your current address? 9 1980.
10 A. 332 South Michigan Avenue, 10 Q. But you practiced for some time?
11 Chicago, Illinois 60604. 11 A. I practiced for less than a year
12 Q. Good morning, Mr. Fischel. 12 after clerking before beginning my
13 A. Good morning. 13 academic career.
14 Q. Could you just state your name 14 Q. And you're familiar with the
15 for the record. 15 federal securities laws?
16 A. Daniel Robert Fischel. 16 A. That's sort of an overbroad
17 Q. And could you state which 17 question. I'm not sure how to answer it.
18 organizations you are employed by or 18 Q. Have you taught classes covering
19 currently affiliated with? 19 the Securities Exchange Act of 1934?
20 A. An economics consulting firm by 20 A. I've actually never taught a
21 the name of Compass Lexecon, and also 21 course in securities regulation. I've
22 University of Chicago. 22 taught many courses dealing with, in one
23 Q. And what's your role at Compass 23 way or the other, the economics of
24 Lexecon? 24 financial markets which covered certain
25 A. I'm the president and chairman 25 aspects of securities regulation. I've
2 (Pages 2 - 5)
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2 also written in that area as well. 2 Do you want me to read them?
3 Q. And do you consider yourself an 3 Q. Well, let me see.
4 expert on securities class action 4 So paragraph nineteen contains
5 litigation under Section 10b of the 5 all of the opinions in the report?
6 Exchange Act? 6 MR. ORSINI: Objection. Vague.
7 MR. ORSINI: I object to form. 7 THE WITNESS: I would say
8 THE WITNESS: It's really the 8 they're my principal opinions in the
9 same answer as I just gave you. I'm 9 case. There's a lot of paragraphs
10 not sure what you mean by that 10 that I guess you could say contain
11 question, whether you're asking me for 11 opinions.
12 a legal opinion or some other kind of 12 Q. But that's a concise summary of
13 opinion. 13 your opinions?
14 Q. Well, you're here today as an 14 A. Those are my principal opinions
15 expert; right? 15 in the case.
16 A. I am. 16 Q. Now, did anyone assist you in
17 Q. What's your expertise? 17 forming your opinions?
18 A. I have a number of areas of 18 A. I would say there was a team of
19 expertise, but for purposes of this 19 people who were working under my direction
20 course, I would say the economics of 20 and supervision who worked with me in the
21 financial markets. 21 case, but of course the opinions are my
22 Q. Economics of financial markets. 22 own.
23 And you've testified in a lot of 23 Q. And how many people were on your
24 10b cases; is that right? 24 team?
25 A. That's I think fair. I've 25 A. I would say the principal
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2 testified in a lot of cases where there 2 members of the team were maybe three or
3 are allegations under the anti-fraud 3 four people.
4 provisions of the securities laws. 4 Q. And what are their names?
5 Q. So did you offer an opinion in 5 A. You know, in no particular
6 this case? 6 order, I would say Jessica Mandel, Laura
7 A. Yes, I did. 7 Yergesheva, Jonathan Polonsky, and Alex
8 MR. ROSEN: So let's introduce 8 Rinaudo.
9 Exhibit 113. That's your expert 9 Q. Alex, what's his last name?
10 report, your opening expert report. 10 A. Rinaudo.
11 (Whereupon, a document entitled 11 And there were research
12 Report of Daniel R. Fischel was marked 12 assistants and other lower level
13 Exhibit 113 for identification.) 13 professionals as well who worked on the
14 Q. Tell me, is that expert report 14 matter. But the people that I mentioned
15 your work? 15 were the people that I coordinated with
16 A. Well, I don't know what the 16 directly.
17 exhibit number is, but -- 17 Q. And what was Jessica Mandel's
18 Q. It's Exhibit 113. 18 role?
19 A. Well, if you're referring to my 19 A. What I just described, working
20 report dated February 16, 2023, yes, I did 20 on the matter with me under my direction
21 author this report. 21 and supervision.
22 Q. Now, what opinions do you offer 22 Q. Did all of them share the exact
23 in your report? 23 same responsibilities, or did some have
24 A. They're stated on page ten in 24 responsibilities for certain aspects of
25 paragraph nineteen. 25 the opinion and others for different
3 (Pages 6 - 9)
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2 aspects of the opinion? 2 your event study, you did an event study;
3 A. I would say a fair description 3 correct?
4 would be they all worked on the case, all 4 A. Correct.
5 aspects of the case with me. 5 Q. And as part of your event study,
6 Q. And as part of your opinion, you 6 there were a substantial number of news
7 ran a regression analysis; is that right? 7 articles that were identified and reviewed
8 A. That's right. 8 to determine if there were news that might
9 Q. Who ran the regression analysis? 9 cause the stock prices of these nine
10 A. Well, it's done by a computer, 10 affected stocks to move up or down;
11 so I'm not sure how to answer the 11 correct?
12 question. 12 A. I'm sorry, can you repeat that
13 Q. Well, somebody hit the keys on 13 question? I don't know what you mean by
14 the computer and told it what to do; 14 "nonaffected stocks."
15 right? 15 Q. Nine.
16 A. Yes. I'm not sure who actually 16 A. Nine, sorry, I misheard you.
17 hit the keys on the computer. The design 17 Q. I'll lay a proper foundation.
18 of the regression analysis was, as I said, 18 So this case involves nine
19 done by me under my -- with the assistance 19 stocks that are traded publicly and they
20 of others working under my direction and 20 are GameStop, AMC Entertainment, Bed, Bath
21 supervision. 21 and Beyond, BlackBerry, Trivago, Tootsie
22 Q. So to run a regression, you need 22 Roll, but you know the nine stocks I'm
23 a certain software package that has that 23 talking about; right?
24 function in it; correct? 24 A. I do.
25 A. Correct. 25 Q. Koss I think is another one.
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2 Q. What software package did you 2 So as part of this -- of your
3 use to run the regression? 3 expert report and as part of the event
4 A. I'd have to check. 4 study, you searched for and identified and
5 Q. And what did you do to ensure 5 reviewed a number of news articles during
6 that the regression analysis was conducted 6 the period that your event study covers;
7 correctly by your team? 7 right?
8 A. It's a very standard type of 8 A. That's right.
9 event study regression. We do make an 9 Q. Now, who obtained the news
10 attempt to check all of our findings from 10 articles?
11 the event study or otherwise, so I would 11 A. The news articles were obtained
12 say that's what we did. 12 from the sources that were identified.
13 Q. But what did you personally do 13 Q. Do you know who on your team
14 to check to make sure that your team ran 14 obtained the news articles?
15 the regression properly? 15 A. Again, there's a data source
16 A. I gave direction as to what to 16 called Factiva and Bloomberg. That's the
17 do, looked at the results, had the results 17 sources for the news articles. What
18 checked. 18 research assistant presumably got those
19 Q. But you didn't personally check 19 articles from those sources I don't know
20 the results to make sure they were 20 without asking.
21 accurate? 21 Q. And did you personally review
22 A. Not other than what I've already 22 each of those news articles that were
23 described. 23 obtained from Factiva and Bloomberg and
24 Q. Now, as part of your regression 24 elsewhere?
25 analysis, you also -- well, as part of 25 A. All of the news articles that
4 (Pages 10 - 13)
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2 were referred to in my report I did look 2 So I guess the first question
3 at. 3 is: Is it true that someone in your office
4 Q. When you say referred to in your 4 -- you can't say who as we sit here today
5 report, is that every news article that 5 -- but someone at Compass Lexecon created
6 was obtained that was published about 6 a set of news articles between January 4,
7 these companies during the class period? 7 2021 and January 27, 2021 that had the
8 A. I would say that it would be the 8 name of the nine affected stocks in the
9 articles that fit the description in the 9 headline or lead paragraphs; is that
10 report from the sources that are referred 10 right?
11 to. There were instances where the same 11 MR. ORSINI: When you say
12 article was published multiple times, so 12 "created", I assume you mean compiled?
13 it probably didn't include the duplicates. 13 MR. ROSEN: Right.
14 But the basic idea was to have a certain 14 THE WITNESS: I mean, if what
15 set of search criteria from a set of 15 you're asking is what's said in the
16 sources and to be inclusive with respect 16 sentence that you just read, I would
17 to those sources and the article contained 17 say correct.
18 in those sources. 18 Q. Now, that collection of news
19 Q. So let's go to paragraph 19 articles that was compiled, did you read
20 thirty-six of your report. 20 each article in that compilation of news
21 It says, "accordingly, we 21 articles?
22 searched news articles for mentions of 22 A. I would say all or part of each
23 company names of the affected stocks in 23 article that is referred to in the various
24 the headline and lead paragraphs of Dow 24 event studies for the different stocks,
25 Jones and Wall Street Journal articles, as 25 and this paragraph only refers to the
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2 well as Bloomberg News for each of the 2 articles in the event study, which is not
3 companies between January 4 and January 27 3 the sum total of all the articles.
4 to determine whether any value-relevant 4 Q. Right.
5 specific news was disclosed that could 5 So who went about to determine
6 have impacted the price of the affected 6 which of these articles that were compiled
7 stocks on days when a statistically 7 that you would actually review? Because
8 significant price movement occurred". 8 someone actually did a first pass and
9 So you wrote that paragraph; 9 determined which ones were relevant and
10 correct? 10 which ones were not relevant; is that fair
11 A. I don't remember if the exact 11 to say?
12 words in this paragraph were written by 12 A. No, that's not fair to say.
13 me. But as I've mentioned several times, 13 Q. So all of the articles from Dow
14 the entire report was prepared under my 14 Jones, Wall Street Journal, Bloomberg, and
15 direction and supervision. 15 SEC filings you took a look at?
16 Q. And then it says, "we 16 A. The articles that are referred
17 supplemented the news articles searches by 17 to in this particular paragraph concluding
18 also searching for any SEC filings for the 18 with appendix D, all the articles in
19 affected stocks' companies over the same 19 appendix D I looked at.
20 period". And then it says, "This review 20 Q. What about the articles that are
21 demonstrates that the vast majority of the 21 not in appendix D, did you look at those
22 price increases for all nine affected 22 articles?
23 stocks cannot be explained by new 23 MR. ORSINI: Objection. Vague.
24 value-relevant company-specific 24 THE WITNESS: Paragraph
25 information". 25 thirty-six is for a particular
5 (Pages 14 - 17)
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2 purpose. There are other articles 2 mentions of the exact same article.
3 that are referred to in the report 3 Q. So there's two sets of news
4 that are not contained in paragraph 4 articles, a larger one and a smaller one;
5 thirty-six because they were compiled 5 correct?
6 for a different purpose. 6 A. You have to be a little bit more
7 Q. So the articles in appendix D 7 specific.
8 are a small subset of the total number of 8 Q. So let's -- there was a set of
9 articles that were identified by your 9 news articles between January 4, 2021 and
10 staff as containing news about the nine 10 January 27, 2021 that your staff collected
11 affected stocks; correct? 11 that either mentioned the one of the nine
12 A. Not really correct the way 12 affected stocks in the headline or
13 you're phrasing the question. 13 discussed it in the lead paragraphs;
14 Q. Well, appendix D does not 14 correct?
15 contain the articles that were reported in 15 A. You're talking about appendix D?
16 Wall Street Journal, Bloomberg, Dow Jones, 16 Q. No, it would be the third
17 and SEC filings listed in paragraph 17 sentence of paragraph thirty-six in your
18 thirty-six; right? 18 report.
19 A. That's right. There are a lot 19 A. The third sentence, the
20 of articles mentioned in the report that 20 "accordingly" sentence?
21 are not contained in appendix D, because 21 Q. Yes.
22 appendix D was, as I've just said, 22 So that is a larger set of news
23 compiled for a particular purpose. 23 articles that is in appendix D; correct?
24 Q. So explain how you narrowed the 24 A. Well, in context, the sentence
25 articles, the number of articles, and the 25 refers to the articles in appendix D. You
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2 specific articles from the greater set 2 can see there are many other articles that
3 from all the articles reported about the 3 are discussed in the report that are not
4 nine affected stocks and those articles 4 contained in appendix D because they are
5 you mentioned in appendix D, how did you 5 not articles about potentially
6 go from the larger subset to the smaller 6 value-relevant company-specific news but
7 subset? How was that done? 7 rather articles about the lack of
8 A. Well, at a high level I would 8 value-relevant -- potentially
9 say appendix D was for the purpose of 9 value-relevant company-specific news,
10 listing articles which mentioned the name 10 rather the effective perceived short
11 of companies in connection with 11 squeezes or other potential causes of
12 information about those companies as 12 artificial price movements.
13 distinguished between -- as distinguished 13 Q. Let's focus on the question.
14 from, I should say, articles about the 14 The question is there is a
15 effect of perceived short squeezes or 15 larger set of news articles that someone
16 other causes of -- other potential causes 16 on your staff compiled, in fact, I believe
17 of artificial prices. Those articles are 17 you sent us a copy of them all. If you
18 discussed separately in the report but 18 want, I can show them to you. It would
19 would not be included in appendix D. 19 make it easier.
20 In addition, with respect to 20 But you will agree that someone
21 appendix D itself, as I mentioned, there 21 on your staff compiled a set of news
22 were instances of just repetition of 22 articles that contained the name of the
23 articles -- the same article was repeated 23 nine affected stocks either in the
24 multiple times. We tried to only include 24 headline or in the lead paragraph of the
25 one mention as opposed to multiple 25 news articles, correct, between January 4,
6 (Pages 18 - 21)
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2 and January 27, 2021; right? 2 context. That's the only point that I'm
3 A. Yes, I would agree with that. 3 making.
4 But even the word "compiled" is a little 4 Q. Did you personally review the
5 bit ambiguous. 5 greater set of news articles?
6 Q. So what did they do if they 6 A. I attempted to review all of the
7 didn't compile them? They collected them? 7 articles that fit the description that I
8 What word would you like to use? 8 described that are contained in the report
9 A. They searched for articles 9 that come from these sources.
10 referred to in the headlines or lead 10 Q. So you did not review the
11 paragraphs of Dow Jones and the Wall 11 greater set of news articles; isn't that
12 Street Journal as well as for certain -- 12 true, Mr. Fischel?
13 as well as Bloomberg in certain specific 13 A. I'm not sure that is true, that
14 instances that were obtained from those 14 meet the criteria that I just described.
15 sources that I just mentioned. 15 Q. I'm not talking about your
16 Q. And you didn't look at all those 16 criteria, I'm talking about my criteria,
17 news articles; correct? 17 I'm talking about my criteria because I'm
18 A. Again, as I've said, I looked at 18 asking the questions.
19 all of the articles referred to in 19 I defined the greater set of
20 appendix D as well as all of the articles 20 news articles to be the larger set of news
21 contained in the report. 21 articles that contained the name of one of
22 Q. Right. 22 the nine affected stocks in the lead
23 I'm talking about what I just 23 paragraph or in the headline between
24 asked you about, which is the greater 24 January 4 and January 27, 2021. We both
25 subset of news articles that were searched 25 understand what the greater set of news
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2 for and identified by your staff about the 2 articles is; right?
3 nine affected stocks that contained the 3 A. Well, I assume any article, the
4 name of the nine affected stocks in either 4 way you're defining the question, any
5 the headline or the lead paragraph between 5 article where the name of the company was
6 January 4 and January 27, 2021. Let's 6 mentioned in the headline or the lead
7 call that the greater set of news 7 paragraph, so in Dow Jones or Wall Street
8 articles. We'll define that as the 8 Journal between January 4 and January 27,
9 greater set of news articles. 9 whether or not it met the criteria of
10 Are you with me? 10 appendix D.
11 A. Yes, but I just want to make 11 Q. Correct.
12 sure -- because you're reading the 12 So understanding that, isn't it
13 sentence out of context, you're no longer 13 true that you did not personally review
14 referring to appendix D, you're just -- 14 each of the articles in the greater set of
15 Q. Exactly. Thank you, thank you. 15 news articles that your staff compiled or
16 I'm not referring to Exhibit D. I'm 16 collected?
17 referring to the greater set of news 17 A. I'm not sure it is true. You'd
18 articles that was compiled by your staff 18 have to show me an article and I could
19 about the nine affected stocks during this 19 tell you if I remember reviewing it or not
20 period January 4 to January 27, 2021. 20 reviewing it.
21 So you understand when I define 21 Q. So which articles -- so when you
22 the greater set of news articles, you know 22 got -- at some point your staff gave you
23 what I mean now; right? 23 some articles to review; right?
24 A. Yes, but you're taking the 24 A. Yes, by definition, that's
25 sentence that you're reading out of 25 correct.
7 (Pages 22 - 25)
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2 Q. And isn't it true that the only 2 January 27.
3 articles you reviewed were in appendix D? 3 Q. So someone on your staff went
4 A. No, that's not correct. That's 4 through the greater set of news articles
5 what I've been trying to explain to you. 5 and determined which articles to present
6 Q. So what different subset, if not 6 to you; isn't that correct?
7 the greater set of news articles as 7 A. No, it's not correct. All the
8 defined or appendix D, what other subset 8 articles were presented to me and I
9 of news articles did you review? 9 reviewed them all.
10 A. There's a whole other set of 10 Q. In the greater set?
11 articles, many of which are described in 11 A. All the articles that are
12 report, many of which were collected but 12 contained in the report, whether or not
13 not described in the -- just let me finish 13 they're in Exhibit D -- excuse me,
14 my answer, please -- that were not 14 appendix D, as well as many other articles
15 potentially value-relevant articles about 15 that were collected that are not in the
16 the companies themselves but were the 16 report because they just repeat the same
17 impact of perceived short squeezes or 17 sentiments as the ones in the report. So
18 other causes of artificial price movements 18 for example, there are paragraphs that
19 in the particular securities in question. 19 talk about articles that are illustrative
20 Q. Now, who went through the 20 of particular points. The articles that
21 greater set of news articles and 21 are illustrative of particular points are
22 determined what was value-relevant? 22 a subset of the total number of articles
23 A. With respect to Exhibit -- the 23 that make the point in that particular
24 articles on appendix D, there was an 24 paragraph, and those have been collected
25 attempt to identify every article that was 25 as well.
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2 mentioned that was about the news about 2 Q. So somebody on your staff went
3 the company in terms of either disclosures 3 through the greater set of articles and
4 by the company or SEC -- information from 4 determined which ones to give to you to
5 SEC filings about the company other than 5 look at; is that correct?
6 the articles which discussed the effect of 6 A. If you mean somebody or maybe
7 potential short squeezes or other 7 more than one person was responsible for
8 potential causes of artificial private 8 collecting the articles from the data
9 movements for those securities during the 9 sources that were identified in the
10 particular period in question. 10 report, I guess by definition that's
11 Q. So who made this attempt to 11 correct.
12 identify every article that was mentioned 12 Q. And they filtered those articles
13 about the companies in terms of 13 and didn't give you all of the ones that
14 disclosures by the SEC or SEC filings in 14 they identified and collected; correct?
15 the articles? Who did that first pass to 15 A. No, I don't think that is
16 determine what was value-relevant? 16 correct.
17 A. I didn't say they were 17 Q. So that means you read every
18 value-relevant, I said articles which 18 single article that was part of the
19 mentioned the name of the company other 19 greater set of articles? Either they
20 than articles that talked about the effect 20 filtered it or you read them all. One or
21 of potential short squeezes or other 21 the other. Which is it?
22 possible causes of artificial price 22 A. I don't agree that those are the
23 movements that affected the prices of 23 only two possible choices.
24 these nine securities during the relevant 24 Q. If you didn't read all of them
25 period, this period between January 4 and 25 and you only read some of them --
8 (Pages 26 - 29)
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2 A. I didn't say I only read some of 2 articles that are referred to in the
3 them. I said if you think there's an 3 report as well as many articles that
4 article that fit the criteria that you 4 are not referred to in the report I've
5 think I didn't read, show it to you and 5 read. If you think there are articles
6 I'll tell you if I remember reading it or 6 that I didn't read, show them to me
7 not. 7 and I'll tell you if I remember
8 Q. So what was the criteria of 8 reading them or not. I'm not aware of
9 articles that you read? 9 any search criteria that identified
10 A. I think I've gone over this 10 articles other than what I've already
11 several times, but I'll say it again, the 11 identified in terms of just articles
12 articles in appendix D as well as a set of 12 repeating the same point that comes
13 other articles that mention the name of 13 out in multiple news services or
14 companies but not in connection with 14 something like that.
15 information that's potentially 15 Q. So based on your answer, it's
16 value-relevant about those companies but 16 clear you did not read all of the articles
17 rather the effect of potential short 17 in the greater set of news articles that
18 squeezes and other possible causes of 18 were mentioned in paragraph thirty-six in
19 artificial price movements on those 19 the third sentence?
20 companies as an explanation for why those 20 A. Well, now you're taking the
21 companies' stock prices were behaving the 21 sentence out of context again with respect
22 way they were. 22 to the articles that are referred to in
23 Q. So who selected the articles 23 appendix D. I tried to clarified that as
24 that you read? 24 best I can multiple times.
25 A. As I've also indicated several 25 Q. Did you or did you not read all
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2 times, the articles came from particular 2 of the articles; yes or no? The answer is
3 data sources and those data sources are 3 no; correct?
4 part of data services that we subscribe to 4 A. No, it's not correct.
5 and I assume one or more research 5 Q. You read all the articles, all
6 assistants downloaded the articles from 6 of the articles that mentioned one of the
7 the sources that I've identified. 7 nine affected stocks in the headline or
8 Q. Did you read all of the articles 8 the lead paragraph; is that right? Is
9 in the greater set of news articles? 9 that what you're telling me?
10 MR. ORSINI: Objection. Asked 10 A. I'm telling you I looked at all
11 and answered. 11 or parts of all the articles that are
12 THE WITNESS: I don't know how 12 referred to in appendix D as well as a
13 to -- 13 wide set of other articles collected for a
14 Q. You can say yes or no. Either 14 different purpose not mentioned in
15 you read them all you didn't. 15 appendix D. I'm not aware of any set of
16 Did you read them all or did you 16 articles that I did not review that met
17 not read them all? 17 either of those criteria, but the only way
18 A. I'll refer to answer the way -- 18 to know for sure is if you show me
19 Q. No, no, it's a yes or no 19 whatever article you want me to look at
20 question. 20 and I'll tell you if I remember reading it
21 MR. ORSINI: He can answer the 21 or not reading it.
22 question the way he sees fit. He's 22 Q. So is it your testimony that you
23 already answered multiple times. 23 read every article that your staff
24 But go ahead, Mr. Fischel. 24 identified that mentioned one of the nine
25 THE WITNESS: All of the 25 affected stocks in the headline or lead
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2 paragraph during this period January 4 to 2 remember looking at them or not, but I'm
3 January 27, 2021? 3 not aware of any set of articles that I
4 A. I really can't add anything to 4 did not review that met any of the
5 what I've already said. 5 criteria that I've identified.
6 Q. Yes or no. 6 Q. Do you know who Steven Grenadier
7 MR. ORSINI: He's already 7 is?
8 answered the question. 8 A. Yes, I do.
9 MR. ROSEN: No, he hasn't. He's 9 Q. When is last time you spoke to
10 avoiding the truth. 10 him?
11 Q. And now is the time for the 11 A. I spoke to him fairly recently,
12 truth, Mr. Fischel. Please tell the 12 actually, about an unrelated engagement.
13 truth. 13 Q. You're aware that he's offered
14 MR. ORSINI: Let's let him ask a 14 an opinion in this case?
15 question instead of pontificating. 15 A. I am aware of that.
16 Q. I'll re-read it. 16 Q. Have you read his report?
17 So is it your testimony that you 17 A. No.
18 read every article that your staff 18 Q. Has anyone discussed his report
19 identified and mentioned -- identified 19 with you?
20 that mentioned one of the nine affected 20 A. It's been mentioned, but other
21 stocks in the headline or lead paragraph 21 than that, I would say no.
22 during this period January 4 to 22 Q. Who mentioned it?
23 January 27, 2021? 23 A. I think -- oh, let me mention
24 MR. ORSINI: Asked and answered. 24 another individual who was part of the
25 THE WITNESS: You want me to 25 team, and your question reminded me. Adel
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2 answer? I'll just repeat what I've 2 Turki. He didn't work with me on a
3 said four times already. 3 day-to-day basis the way the others did,
4 Q. You can answer yes or no. Not 4 but he was certainly involved in the
5 obfuscate, not make things up, just yes or 5 matter. And I think he was the first one
6 no? 6 that identified that Professor Grenadier
7 MR. ORSINI: Stop with the 7 was also submitting an expert report.
8 argument. Ask a question. 8 Q. Did he tell you what Grenadier
9 MR. ROSEN: I've asked the 9 was including in his report?
10 question. 10 A. No, not that I recall.
11 MR. ORSINI: Mr. Fischel has 11 Q. Did your staff coordinate your
12 answered it multiple times already. 12 report with his staff?
13 Q. Give us a straight answer, 13 A. I don't believe so, no.
14 please. 14 Q. Have you ever purchased equity
15 A. I've attempted to look at in 15 securities?
16 whole or in part every article that's 16 A. Ever? You mean individual
17 referred to in appendix D as well as 17 stocks? Not that I can remember. I don't
18 multiple articles that were collected for 18 think so.
19 a different purpose. That's what I can 19 Q. Do you invest in mutual funds or
20 say. I can't answer definitively whether 20 ETFs?
21 I've read or looked at every single 21 A. I guess I would say indirectly,
22 article without knowing what articles 22 yes, I do.
23 there are that you think I might not have 23 Q. Indirectly in what respect?
24 looked at. If you show them to me, I can 24 A. That I don't choose them. Some
25 give you a more definitive answer if I 25 of my retirement accounts have had mutual
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2 funds in them. 2 every minute of every day.
3 Q. What are the allegations of 3 Q. Are you familiar with your
4 misconduct in this case? 4 report?
5 A. Well, my understanding of the 5 A. I hope so.
6 allegations are contained in my report. 6 Q. So within it you say that the
7 Obviously they're not my allegations, so 7 share price declined for reasons other
8 it's really a question better addressed to 8 than the restrictions placed by Robinhood;
9 you than to me. But my understanding of 9 right?
10 the allegations is what's contained in my 10 A. Why don't you show me what
11 report. 11 you're referring to.
12 Q. And do you know what the 12 Q. So paragraph twenty-three of
13 elements of the claims in this case are? 13 your report, you assert that the affected
14 A. That sounds like a question 14 stocks experienced large price increases
15 asking for a legal opinion. I'm not 15 during the preclass period; is that right?
16 offering any legal opinions. 16 A. Yes, that's the first sentence
17 Q. Now, in your report you 17 of the paragraph.
18 mentioned that there are other brokerage 18 Q. And do you have an opinion as to
19 firms that implemented restrictions on the 19 what caused those price increases?
20 purchase or sale of the stocks or options 20 A. I think I discuss that at length
21 of one or more of the nine affected 21 in my report. I think there was certainly
22 stocks; is that correct? 22 a perception of a short squeeze that was
23 A. That's correct. 23 occurring as well as intensive social
24 Q. How did you come to identify the 24 media speculation. That combination is
25 names of those firms and the nature of the 25 based on the analysis that was conducted
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2 restrictions and the timings of those 2 contemporaneously at the time. I think
3 restrictions? 3 that's the best explanation for the
4 A. From the sources that are 4 extreme artificial price movements during
5 identified in my report. 5 what I refer to as the preclass period.
6 Q. And what did you do to check the 6 MR. ORSINI: We've been going
7 accuracy of those sources? 7 over an hour.
8 A. I'm not sure we did anything to 8 Do you want to take a break or
9 check the accuracy of the sources. If 9 do you want to go longer? It's your
10 you're referring to the introduction 10 call.
11 basically, the background material, I 11 THE WITNESS: I'm fine. I'm
12 think that refers to my understanding of 12 happy to go as long as convenient for
13 the relevant background based on the 13 others.
14 sources that are referred to in that 14 Q. So you said there was a
15 discussion in my report. 15 perception of a short squeeze?
16 Q. So on January 28, 2021, the 16 A. Correct.
17 share prices of each of the nine affected 17 Q. Do you know whether or not there
18 stocks declined; is that correct? 18 was, in fact, a short squeeze for any of
19 A. Are you referring to something 19 the nine affected stocks?
20 specific? 20 A. I don't have an independent
21 Q. The stock prices of the nine 21 opinion about that. I know there was
22 affected stocks. 22 widespread commentary about the existence
23 A. I know that, but an exhibit or a 23 of a short squeeze.
24 chart or something like that? I haven't 24 Q. So you didn't take any steps to
25 memorized the stock price movements on 25 confirm whether or not there was, in fact,
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2 a short squeeze? 2 wasn't. I didn't say what would
3 A. As I said, I didn't form any 3 happen if there wasn't a short
4 independent opinion about it other than 4 squeeze. I just said that the
5 forming an opinion about the causes of the 5 explanations given for the extreme
6 artificial price movements. 6 artificial price movements during what
7 Q. What's your -- 7 I refer to as the preclass period were
8 A. Excuse me, during the preclass 8 the perception of the existence of a
9 period that I've identified. 9 short squeeze as well as excessive
10 Q. You said you formed an opinion 10 social media speculation.
11 about the cause of the artificial price 11 Q. You used the term "artificial
12 movements in the preclass period; is that 12 price movements".
13 correct? 13 What makes a price movement
14 A. That's right. 14 artificial?
15 Q. What is your opinion about the 15 A. In this particular context, the
16 cause of the artificial price movements in 16 existence of extreme price movements that
17 the preclass period? 17 are not linked in any way to changes in
18 A. What I said and what's discussed 18 information about the value of the -- the
19 extensively in my report, the perception 19 fundamental value of any of the affected
20 of a short squeeze combined with excessive 20 companies and particularly price movements
21 social media speculation. 21 that are understood to be not just
22 Q. Let's start with the short 22 artificial but temporary precisely because
23 squeeze. 23 there is artificial.
24 So is it your opinion that, even 24 Q. Is it your opinion that because
25 if there isn't a short squeeze, if there's 25 the stock prices moved and there was not,
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2 a perception of a short squeeze, that 2 in your opinion, news that would affect
3 would cause the price of the affected 3 the fundamental value of the stocks, such
4 stocks to increase? 4 price movement is, by definition,
5 A. My opinion is not an opinion in 5 artificial?
6 the abstract, it's an opinion based on the 6 A. You know, that's too broad of a
7 materials that I've reviewed as described 7 statement. I was referring to the
8 in my report about the explanations that 8 particular context of the facts and
9 were given for the extreme artificial 9 circumstances of this case and in the
10 price movements during what I refer to as 10 context of the facts and circumstances of
11 the preclass period. 11 this case where certain stocks went up by
12 Q. So are you answering my question 12 two thousand percent in a matter of weeks
13 with a yes? 13 without any value-relevant explanation for
14 A. I'm answering your question the 14 those stocks -- for those stock price
15 way I answered it. 15 movements combined with all of the
16 Q. Well, you didn't answer it. 16 analysis and commentary that's contained
17 Is it is it your opinion that, 17 in my reports during the preclass period,
18 even if there is not a short squeeze, if 18 I would say that under those facts and
19 there is merely a perception of a short 19 circumstances I would say that those price
20 squeeze, that would cause the price of the 20 movements were artificial and widely
21 nine affected stocks to increase? 21 understood to be such.
22 MR. ORSINI: Incomplete 22 Q. What does it mean to be
23 hypothetical. 23 artificial? There was a real price
24 THE WITNESS: Well, first of 24 movement; right? It went from X dollars
25 all, I didn't say there was or there 25 to Y dollars.
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2 What makes it artificial? 2 the extreme artificial price movements
3 A. What I just said, which is just 3 during the class period as well as some I
4 a summary of what I've already described 4 guess you could say after-the-fact
5 earlier and also described in my reports. 5 explanations as well.
6 Q. The lack of value-relevant news, 6 Q. Now, you say there were -- there
7 is that what makes it artificial? 7 was excessive social media speculation
8 A. I think, as I've just mentioned, 8 about the nine affected stocks in the
9 my opinion is based on the facts and 9 preclass period?
10 circumstances of this case, the extreme 10 A. Correct.
11 price movements in a very short period of 11 Q. How do you define excessive
12 time that were widely understood to be 12 social media speculation?
13 artificial and temporary as a product of a 13 A. Again, the explanations that
14 perceived short squeeze and excessive 14 were given contemporaneously for what was
15 social media speculation. 15 responsible for the extreme artificial
16 Q. So you said there's two things 16 price movements during the period.
17 that made the price movements artificial. 17 Q. But what social media
18 One was the perceived short squeeze and 18 speculation? Can you give me an example
19 the other was excessive media speculation; 19 of social media speculation?
20 is that right? 20 A. I discuss the, for example, all
21 A. No, that's not right. 21 of the commentary on social media sites
22 Q. So the excessive social media 22 such as Reddit about the possibility or
23 speculation did not cause any artificial 23 the perceived short squeeze and the
24 price movements in these nine affected 24 possible effect that had on prices and the
25 stocks? 25 ability of retail investors to take
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2 A. I didn't say that either. 2 advantage of the position the short sale
3 Q. So what role did the perceived 3 created by institutional investors.
4 short squeeze have in the increase in 4 Q. Did you review any of the
5 these stocks in the preclass period? 5 postings on Reddit?
6 A. It was widely attributed to be a 6 A. I saw some referred to. I
7 cause of the extreme price movements. 7 didn't make -- I did not make an attempt
8 Q. And is your opinion based on 8 to review all the systematic -- I did not
9 this wide attribution you're adopting as 9 make a systematic review of all the
10 your opinion the attribution you found in 10 commentary on Reddit.
11 the news media; is that right? 11 Q. Did you review any specific
12 A. It's not just in the news media, 12 postings on Reddit?
13 but my opinions are what I've stated. 13 A. I saw some referred to in other
14 Q. But make any effort to determine 14 documents that I referred to. That's what
15 what caused the prices of these stocks to 15 I recall.
16 increase in the preclass period? 16 Q. So you saw Reddit postings
17 A. Yes, the ones that I've 17 referred to in other news articles?
18 described that are also contained in my 18 A. Or other sources, correct.
19 report. 19 Q. But you never actually read any
20 Q. So what efforts did you make to 20 Reddit postings yourself; is that correct?
21 determine the cause of these price 21 A. Well, I read them when they were
22 increases? 22 contained in other postings or other
23 A. I analyzed all the publicly 23 articles or other sources that I reviewed.
24 available information that I could find 24 Q. What other sources are you
25 about the contemporaneous explanations for 25 referring to?
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2 A. I looked at a lot of pleadings, 2 each of those stocks on January 27, 2021,
3 briefs, court opinions, analyst reports 3 if not the market price?
4 containing target prices. 4 A. Well, I would say one way to
5 Q. So you -- 5 analyze that question is to look at the
6 A. That's what I recall. 6 market prices subsequent to the class
7 Q. -- relied on other sources to 7 period. And I actually have an exhibit on
8 provide you with information about the 8 that in my report. So I would say based
9 social media? 9 on the analysis that I've done, that would
10 A. Well, I wouldn't say that 10 be at least one estimate of a true value
11 exactly, just the existence of a 11 on January 27, although that's not --
12 perception that what was going on in 12 those prices in my report are not --
13 social media was one of the drivers of the 13 they're as of a later date and there may
14 artificial price movements. I also cited 14 be continued dissipation of article
15 some academic studies that discussed the 15 Fischel inflation subsequent to that day.
16 role of social media in terms of how they 16 But in terms of what I've analyzed, I
17 contribute to the existence of fads and 17 would say that is a good estimate subject
18 bubbles and artificial price movements. 18 to those caveats of true value.
19 That's also discussed in my report. 19 Q. What is your analysis?
20 Q. Is it your opinion that each of 20 A. I analyzed the relationship
21 the nine affected stocks were overvalued 21 between prices on January 27 and during
22 as of the close of business on January 27, 22 the class period and prices at the end of
23 2021? 23 the class period. I have an exhibit about
24 A. Well, I focused on -- I looked 24 that.
25 at all nine. I focused on seven more than 25 Q. And which exhibit is that?
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2 nine because of my understanding of the 2 A. I'm trying to find which report
3 claims in the case and it's my opinion 3 it's in. It's here somewhere.
4 that certainly the seven and possibly the 4 I'm flipping pages too fast.
5 nine as well experienced artificial price 5 Sorry, I have to do this.
6 movements for the reasons that I described 6 Q. No worries.
7 during the -- what I referred to as the 7 A. No wonder. I was looking at
8 preclass period between January 4 and 8 Grenadier's report.
9 January 27, 2021. 9 It's table three on page fifteen
10 Q. So just focusing on the seven, 10 of my rebuttal report.
11 the seven stocks that Dr. Werner found to 11 Q. I was going to ask you about
12 be efficient in the year prior to the 12 this. I might as well ask you about it
13 class period? Is what the seven you're 13 now?
14 talking about? 14 MR. ORSINI: To you want to mark
15 A. Yes. 15 his rebuttal?
16 Q. So focusing on the seven, is it 16 MR. ROSEN: Sure.
17 your opinion that those seven stocks were 17 We're going to mark the rebuttal
18 overvalued as of the close of trading on 18 report as Exhibit 114.
19 January 27, 2021? 19 (Whereupon, a document entitled
20 A. To the extent the definition of 20 Rebuttal Report of Daniel R. Fischel
21 "overvalued" means inflated by artificial 21 was marked Exhibit 114
22 price movements particularly as a result 22 for identification.)
23 of the price movements on January 27, I 23 Q. So could you explain what
24 would say yes, that is my opinion. 24 Exhibit 1 on page -- I'm sorry, table
25 Q. And what was the true value for 25 three on page fifteen is in your rebuttal
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2 report? 2 Q. Now, what do you believe this
3 A. It's a comparison of trading 3 table shows then? What inference are you
4 prices during the class period measured in 4 asking the reader to take from it?
5 a particular way versus the price 5 A. It's an indication going back to
6 immediately after the class period again 6 paragraph twenty-six which really relates
7 measured a particular way. 7 to the question that you asked me a couple
8 Q. So let's look at -- you're using 8 of minutes ago about the difference
9 volume-weighted average price? 9 between the alleged damages -- alleged
10 A. That's right. 10 model of Dr. Werner and the typical
11 Q. So it's the volume-weighted 11 securities case where -- I'm just now
12 average price as of what point in time? 12 paraphrasing paragraph twenty-six -- in
13 First explain what a volume-weighted 13 the typical securities case inflation is
14 average price is. 14 measured as the difference between the
15 A. It's a price weighted by volume. 15 prices paid and the true value to
16 Q. For each trade in a day? 16 generalize at a very high level where the
17 A. Well, the volume-weighted price 17 true value is measured based on what the
18 per day is a statistic quoted by 18 price is absent the alleged wrongdoing.
19 Bloomberg. 19 But in this case, the alleged wrongdoing,
20 Q. So if there were a thousand 20 according to the plaintiffs as measured by
21 shares traded and half were at a dollar 21 Dr. Werner, are the actions that occurred
22 and half were at $2, the volume-weighted 22 during the class period. So therefore,
23 price would be $1.50? 23 one way to think about what the true value
24 A. I assume so. I'm not exactly 24 is is what prices are when those alleged
25 sure how Bloomberg calculates it, but it's 25 wrongful activities cease, when they're no
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2 a data source that comes from Bloomberg. 2 longer occurring. And based on that
3 Q. So that's a daily price, an 3 analysis, you would look at the
4 average daily price, more or less; right? 4 relationship between the sale prices and
5 A. Weighted by volume. 5 the price that existed subsequent to the
6 Q. Weighted by volume. 6 alleged wrongful activities and you would
7 And then column one says class 7 conclude exactly the opposite of what Dr.
8 period, so is that an average of the 8 Werner concluded.
9 volume-weighted average price for each day 9 In other words, you wouldn't
10 during the class period? 10 measure damages by the difference between
11 A. It's each day during the class 11 the sale price and the highest inflated
12 period weighted by volume. In other 12 price, which is what Dr. Werner does. You
13 words, you have six different 13 would instead measure damages or the
14 volume-weighted prices for each day during 14 existence of damages by comparing the sale
15 a class period and those days themselves 15 price with a true value which in this case
16 are then averaged based on volume during 16 is lower than the sale price and would
17 the class period. 17 conclude there are no damages, and that's
18 Q. And then you have a February 5, 18 really the point of the exhibit and this
19 2021 price, and that's just the 19 particular paragraph. And that conclusion
20 volume-weighted average price for that 20 would be even stronger if you compared the
21 day; is that correct? 21 prices on February 5 with the price on
22 A. That's correct. 22 January 27, which is not on this exhibit
23 Q. And that's the day after the 23 but it's on other exhibits that are
24 class period; is that right? 24 contained in my reports, and what you
25 A. That's correct. 25 would see was that the price on February 5
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2 is dramatically lower than the price on 2 A. Yes, exactly.
3 January 27. And for all the reasons that 3 Q. So it shows the first column --
4 I've stated, the price on February 5 is 4 sorry, first row for January 28, 2021
5 much -- is a much better and a much closer 5 matched against each column for each
6 measure of true value than the maximum 6 stock, it shows the decline on that
7 artificial inflated price on January 27. 7 specific day; is that right?
8 Q. And the February 5 price is a 8 A. It shows the residual decline.
9 better estimate of true value because, in 9 Q. And so AMC went down fifty-four
10 your opinion, on February 5, when the last 10 percent on January 28?
11 of the restrictions was lifted, the prices 11 A. Not the price but the product of
12 should have shot back up to the January 27 12 the regression analysis, there was a
13 level? 13 decline by fifty-four percent.
14 A. I don't believe they should have 14 Q. It says total -- so the residual
15 shot back up, but I would say one test of 15 return?
16 the validity of Plaintiffs' claim, if the 16 A. That's right, went down by
17 -- if Dr. Werner were correct and 17 fifty-four percent.
18 Plaintiffs were correct that the price on 18 Q. When you take out market factors
19 January 27 was the so-called true value of 19 and industry factors, did you have an
20 the stocks and they were manipulated away 20 industry index, I assume?
21 from their true value during the class 21 A. Yeah.
22 period is whether or not there was a 22 Q. So the residual decline,
23 return to the January 27 price when the 23 firm-specific decline is fifty-four
24 alleged wrongful conduct was no longer 24 percent for AMC?
25 occurring. And what you observe is the 25 A. On January 28, that's correct.
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2 exact opposite which, in my opinion, is a 2 Q. Now, what caused that decline in
3 direct refutation of the plaintiffs' case 3 AMC stock on January 28?
4 as well as the damage -- the so-called 4 A. You know, I say in my report
5 damage model, which I describe as 5 that it's very hard to disentangle the
6 incoherent presented by Dr. Werner. 6 various possible causes of the decline.
7 THE WITNESS: This is a good time 7 First of all, there was a huge increase on
8 for a break, if that's okay. 8 January 27 which is understood to be
9 MR. ORSINI: Sure. 9 temporary, so there's going to be some
10 (Whereupon a break was taken) 10 decline at some point just by virtue of
11 Q. So in your rebuttal report, we 11 the nature of a temporary artificial price
12 were looking at that table on page 12 increase. In addition to that, there are
13 fifteen, I think it was, and -- table 13 all the actions that I describe in the
14 three. And it shows that after 14 background section of my report and one of
15 January 27, the prices declined, is that 15 the criticisms that I have of Dr. Werner's
16 right, for these nine stocks? 16 damage model and more generally whether
17 A. Yes. As I said, I have other 17 it's possible to have a common method to
18 exhibits which show that a little bit more 18 analyze damages as all the different
19 directly. 19 potential causes of the stock price
20 Q. What exhibit would that be? 20 decline. So that's what I would say.
21 A. That would be -- 21 Q. So on table two, does that go
22 Q. Table two? 22 from closing prices on January 27 to
23 A. Let me just find it. 23 closing price on January 28; is that
24 Q. Page eight, table two of your 24 right?
25 rebuttal? 25 A. Adjusted for market and industry
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2 movements, correct. 2 January 27 that was bound to revert to a
3 Q. Now, you said there were two 3 mean? Where is that described in your
4 things that caused the price decline. 4 report?
5 One was the temporary nature of 5 A. I discuss several places in my
6 the price increase on January 27; is that 6 report where I discuss the fact that the
7 correct? 7 extreme artificial price movements that
8 MR. ORSINI: I object to form. 8 occurred in what I referred to as the
9 THE WITNESS: That's not exactly 9 preclass period were understood to be
10 what I said. 10 temporary. I also discuss academic
11 Q. I just want to make sure I 11 literature that discusses the temporary
12 understand it before I go further. 12 nature of artificial price movements. And
13 So what were the causes -- what 13 that's what I was referring to in my
14 were the potential causes of the price 14 previous answers.
15 decline on February 28 for these stocks? 15 Q. Could you tell me what academic
16 A. I think that's what I just said. 16 literature supports your assertion that
17 There was going to be, in the absence of 17 the prices of these nine stocks were bound
18 any actions by anyone, there was going to 18 to decline at some point?
19 be some mean reversion at some point in 19 A. Well, the academic literature
20 time, particularly in light of the 20 doesn't discuss these nine stocks, it's a
21 dramatic increase on residual return on 21 more general discussion of the effect of,
22 January 27. I have another table that 22 in this case, artificial price increases.
23 shows that. 23 Q. Could you point me to where in
24 In addition to that, there was a 24 your report this literature is mentioned?
25 series of actions taken by different 25 A. (Reviewing).
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1 D. R. Fischel 1 D. R. Fischel
2 economic actors that are described in the 2 Academic literature is discussed
3 background section of my report. 3 in various places: In paragraph
4 Q. Any others besides those two? 4 twenty-seven of my original report, in
5 A. Well, to the extent that any 5 footnote twenty-six of my rebuttal report,
6 part of the decline is explained by market 6 paragraph twenty-one and footnote
7 and industry movements, but I wouldn't say 7 thirty-one, thirty-two --
8 that would come close to explaining 8 Q. Say that again? Footnote
9 declines in residual returns by fifty-four 9 twenty-six? Which academic literature
10 percent, since that's the one you were 10 talks about mean reversion of temporary
11 asking me about before the break. 11 stock price inflation? Which articles in
12 Q. Presumably these residual 12 footnote twenty-six of your rebuttal
13 returns have excluded the -- have taken 13 report are you referring to?
14 into account the market industry factors; 14 A. The Ferrillo article talks about
15 right? 15 the recommendations of authors to inspect
16 A. Right. 16 the affected stocks for bubbles and
17 Q. So we're left with this mean 17 overreactions. It's Ferrillo, Dunbar, and
18 reversion and the actions of third parties 18 Tabak. That's what I was referring to in
19 and others; right? 19 footnote twenty-six.
20 A. Correct. 20 Q. So you're telling me that
21 Q. So let's start with the mean 21 article states that if a stock price has
22 reversion. 22 increased greatly because of speculation,
23 Where in your report do you 23 it will revert to its mean?
24 describe this mean reversion or this 24 A. That's not what I said.
25 temporary nature of the stock prices on 25 Q. Well, but you said that -- you
17 (Pages 62 - 65)
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2 did say that one of the reasons the stock 2 because you're now asking a question about
3 price declined was it was going to revert 3 trying to predict what would have happened
4 to the mean, meaning it was inflated and 4 in a world which didn't exist, it's really
5 it was going to go back down to a lower 5 impossible to pinpoint the time where the
6 price just by the nature of the inflation? 6 decline would have occurred other than
7 Am I missing something? 7 saying that it was widely understood that
8 A. That's not a real accurate 8 the -- the increase was widely understood
9 characterization of what I said. 9 to be artificial, temporary, and was sure
10 Q. Why don't you explain it then. 10 to decline at some point in time.
11 A. That fads and bubbles that are 11 Q. So do you have any opinion as to
12 characterized by overreactions are by 12 when this inevitable decline for the nine
13 definition temporary. That's what it 13 affected stocks would have occurred?
14 means to say there is a fad or a bubble. 14 A. No, that's just what I said. No
15 That's what I meant. 15 specific opinion because there's no way to
16 Q. And how temporary was this -- so 16 know other than I guess you could say the
17 are you saying the stock price on 17 nature of these kinds of fads or bubbles
18 January 27, 2021 for these nine stocks 18 are inherently short term, so they don't
19 were a bubble? 19 last forever. But beyond that, once you
20 A. You could call them a bubble. 20 basically change the assumptions of what
21 Q. I'm asking what you call them. 21 happened in the real world to ask what
22 A. I call them what I said, extreme 22 would have happened in a different world,
23 price inflation resulting in artificial 23 there's no way to know what could have
24 prices which were widely understood to be 24 happened in a different world, other than
25 temporary and therefore were going to 25 to say it was widely understood and
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1 D. R. Fischel 1 D. R. Fischel
2 decline at some point in time. 2 commented upon about the price increases
3 Q. If there had not been any 3 were artificial and temporary.
4 restrictions imposed by Robinhood or any 4 And just to complete the answer
5 other firm on the trading of these nine 5 as I was describing before the break, the
6 affected securities, would -- is it your 6 level of prices subsequent to the time of
7 opinion that the prices would have 7 the alleged wrongful conduct, the fact
8 declined anyway on January 28 through 8 that they did not rebound and were below
9 February 4? 9 the level of prices during the class
10 A. That's too specific. It's I 10 period is illustrative of the temporary
11 think impossible to know what would have 11 nature of the price increases to begin
12 happened in a world that never occurred. 12 with.
13 But because of the nature of the extreme 13 Q. So let's talk about the second
14 price increases, gains of two thousand 14 potential cause of the stock price
15 percent in a couple of week period for 15 declines on January 28 for these nine
16 some of the stocks with no connection to 16 affected stocks.
17 any change in fundamental value, those 17 You said that -- in your report
18 increases were understood to be temporary, 18 in the background section, you mentioned
19 widely commented on to be temporary, so 19 some of the actions taken by Robinhood and
20 that decline was going to occur inevitably 20 third parties. Let's see if we can
21 at some point in time. 21 identify this.
22 Q. It might have happened in a 22 Where in your report do you
23 week, it might have happened in a month; 23 describe the actions of firms other than
24 right? 24 Robinhood that might have affected the
25 A. I think there's no way to -- 25 stock prices on January 28?
18 (Pages 66 - 69)
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2 A. Again, that's not really an 2 answered that to the best of my
3 accurate description of what I said. But 3 ability.
4 in response to where I discuss the actions 4 Q. And the answer is yes or no?
5 of third party actors in response to the 5 A. The answer is I didn't perform
6 large increase in volatility and prices, 6 any separate calculation of those trading
7 that's discussed in multiple paragraphs it 7 halts. And I think it's also important
8 looks like beginning on paragraph ten. 8 that I'm not sure how confident one could
9 Q. So there was some trading halts, 9 be in the conclusion because there was so
10 according to you, on January 27 and 10 many other things going on during those
11 January 28. 11 two days, including during those minutes
12 Did these trading halts cause an 12 where the trading halts occurred.
13 increase or a decrease in stock price of 13 Q. And how about the trading halts
14 these companies? 14 on January 28? Do you have any opinion as
15 MR. ORSINI: Objection. 15 to whether those trading halts had any
16 THE WITNESS: I didn't 16 effect on the prices of any of the nine
17 separately calculate if it's even 17 affected stocks?
18 possible to separately calculate the 18 A. It's really the same answer
19 effect of those particular actions 19 again.
20 versus all the other things that were 20 Q. And that answer is?
21 happening during these particular 21 A. That other than knowing that on
22 days. 22 the twenty-eighth there were big declines
23 Q. Well, so footnote sixteen says 23 across the board in the nine stocks,
24 NYSE halted trading in GME three times for 24 exactly what was responsible for those
25 a total of fifteen minutes on January 27. 25 declines, trying to disentangle the effect
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1 D. R. Fischel 1 D. R. Fischel
2 Did that cause an increase or a 2 of the mean reversion from the extreme
3 decrease in the stock price? 3 price increases, artificial price
4 A. As I said, I didn't separately 4 increases on the twenty-seventh, the
5 perform any calculations of those specific 5 actions of all the economic actors that
6 actions, recognizing that there are a lot 6 began to be imposed by all the different
7 of other things going on even during those 7 economic actors that I describe in my
8 minutes on January 27 and 28. 8 report, it's very hard if not impossible
9 Q. So is it your opinion the NYSE 9 to try and disentangle.
10 trading halt on January 27 had an effect 10 Q. Do you have an opinion as to
11 on these nine stocks or it didn't have an 11 whether or not the mean reversion was a
12 effect on the nine stocks' prices? 12 material cause of the stock price decline
13 A. My opinion is what's stated in 13 to the affected stocks on January 28?
14 the report that these actions taken in 14 A. Not that specifically for the
15 response to the perceived volatility in 15 reasons that I already said, other than
16 price movements that were occurring in the 16 that reversion was going to occur at some
17 meme stocks during this period and prior 17 point in time.
18 to this period in what I refer to as the 18 Q. So you have no evidence that
19 preclass period. 19 that mean reversion was the cause of any
20 Q. Do you have an opinion as to 20 stock price declines for the nine affected
21 whether the trading halts on January 27 21 stocks on January 28?
22 did or did not on effect on any of the 22 A. With respect to that specific
23 nine affected stocks' prices? 23 day, I don't think it's possible to
24 MR. ORSINI: I object it form. 24 isolate in a factor from all the other
25 THE WITNESS: I think I've 25 factors in the same way it's not possible
19 (Pages 70 - 73)
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2 to isolate the effect of all of the 2 to persist because they were temporary.
3 different economic actors versus all the 3 Q. So the evidence that the price
4 other things that were going on during 4 declines are related to mean reversion is
5 that period. 5 a, quote, widespread understanding in the
6 Q. And I appreciate the difficulty 6 news media and academic literature?
7 of isolating specific factors. But let's 7 A. Exactly.
8 just focus on that one factor, mean 8 Q. Anything else?
9 reversion that you mentioned. 9 A. Well, I think contemporaneous
10 Do you have any evidence at all 10 discussions combined with academic
11 that mean reversion was a material cause 11 literature. That's what I would say.
12 of any of the stock price declines for the 12 Q. How would you define "extreme
13 nine affected stocks on January 28? 13 social-driven media enthusiasm"?
14 A. As I said, I don't have an 14 A. Well, the way I'm defining it is
15 opinion about that specific day other than 15 -- in response to your earlier questions
16 the artificial price -- the extreme 16 of what the discussion was at the time of
17 artificial price increases were understood 17 the reasons for the extreme artificial
18 to be temporary. The most extreme price 18 price movements as well as the -- again,
19 increase occurred on January 27 across the 19 the academic literature that I also
20 board, and that was understood to be 20 discuss in my report that discusses the
21 temporary, and so a decline was going to 21 role of social media in creating
22 occur at some point in time based upon the 22 artificial price movements in the form of
23 general -- both the contemporary 23 bubbles or fads.
24 literature as well as academic literature 24 Q. So did you ever hear the term
25 in the short term. But since you're 25 "diamond hands"?
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2 asking about something that's so specific 2 A. Diamond hands?
3 to one day, whether prices would have 3 Q. Yes.
4 continued to increase, whether they would 4 A. No, I don't think I have, or at
5 have decreased, whether they would have 5 least I don't remember it.
6 decreased on the same day, on the same 6 Q. The social media enthusiasm for
7 days, by the same amounts, there's no way 7 the nine affected stocks, was that -- what
8 to know precisely because there's so many 8 was that enthusiasm based on?
9 different factors that were occurring at 9 A. Well, as I mentioned, what I'm
10 the same time. 10 familiar with is the discussion of the
11 Q. Could you cite one piece of 11 short squeeze or the perceived short
12 evidence for the proposition that mean 12 squeeze and the possible implications that
13 reversion was responsible for any of the 13 that has on investment opportunities for
14 share price declines for any of the nine 14 retail investors.
15 affected stocks during the class period? 15 Q. Now, if somebody wants to go
16 A. The evidence that I can cite is 16 long and squeeze short sellers, is that a
17 what I've stated, that there was 17 long-term investment or is that an
18 widespread understanding both at the time 18 investment that has to be sold relatively
19 and in the academic literature that the 19 quickly in order to profit and not lose
20 type of extreme price movements that 20 money?
21 occurred where some stocks went up by two 21 MR. ORSINI: I object to form.
22 thousand percent in a matter of weeks with 22 THE WITNESS: I'm not sure I
23 no change in the information about their 23 understand the question. But in order
24 fundamental values is by definition 24 to profit, you have to sell at a
25 temporary, and those prices were not going 25 higher price than what you paid. So
20 (Pages 74 - 77)
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2 by definition, the horizon of the 2 advocating the purchase for the long-term
3 investment has to be at an expectation 3 to hold and never sell?
4 that you're going to be able to sell 4 A. No, I don't. I think all kinds
5 at a higher price than what you paid, 5 of things were being said on social media.
6 assuming that -- if you're asking in 6 My focus was on the class members
7 the abstract, assuming that you're 7 specifically or the alleged class members.
8 purchasing for investment purposes as 8 Q. You mean the class
9 opposed to for diversification or some 9 representatives?
10 other purpose. 10 A. The class representatives and
11 Q. Now, the people that you're 11 the class members.
12 referring to who had extreme social 12 Q. Well, how do you know who the
13 media-driven enthusiasm, are those retail 13 class members are besides the people who
14 investors? 14 are part of our lawsuit?
15 A. I think the social 15 A. There's extended analysis of
16 media-focused, at least my understanding 16 that in my reports as to not who they were
17 based on what I've reviewed, focused on 17 by name but the timing of their investment
18 retail investors. 18 decisions.
19 Q. And did all of these retail 19 Q. Now, is it your opinion that the
20 investors who are part of this social 20 people who were buying shares of the nine
21 media-driven enthusiasm, were they all 21 affected stocks during the preclass period
22 focused on making money as part of the 22 that you defined were manipulating the
23 short squeeze? 23 market for these stocks?
24 A. You'd have to ask them. I don't 24 A. My opinion is what I stated,
25 know. I was commenting on the commentary 25 that -- in my report that they're going to
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2 in social media, not on the motivations of 2 be members of the class who purchased at
3 all retail investors, although I do think 3 artificial prices knowing that the prices
4 some of the testimony by the class 4 were artificial.
5 representatives was, in my opinion, highly 5 Q. Did everyone who's a member of
6 revealing as to what their reasons were 6 the class purchase knowing the prices were
7 for purchasing. 7 artificial?
8 Q. Is it possible that there were 8 A. I don't have that opinion. My
9 many people who were part of this social 9 opinion is individualized inquiry is
10 media enthusiasm who intended to hold the 10 required to distinguish between those
11 nine affected stocks for the long-term as 11 class members who purchased based on an
12 an investment? 12 awareness of the existence of artificial
13 A. You are you're asking me is it 13 prices as several class members, in fact,
14 possible? 14 testified. And with respect to those
15 Q. Yes. 15 investors, they did not purchase based on
16 A. I can't comment on what's 16 a belief in the integrity of market prices
17 possible, only that in order to profit by 17 but rather an attempt to profit by the
18 purchasing at a knowingly artificial 18 lack of existence of an integrity of
19 price, you have to expect that you're 19 market prices, as I state in my report.
20 going to be able to sell at an even more 20 Q. And what questions would you ask
21 -- an even higher artificially inflated 21 class members to determine whether or not
22 price. 22 they relied on the integrity of the market
23 Q. Do you know whether or not there 23 price when they purchased?
24 was a large contingent of people active in 24 A. Well, I'm not offering an
25 the social media who were purchasing and 25 opinion on what questions to ask, but --
21 (Pages 78 - 81)
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2 Q. You said individual inquiry is 2 the market prices, is it your testimony
3 necessary. 3 that one has to believe that the
4 What individual inquiry would 4 underlying market price is the true value
5 you make? You say it's necessary so that 5 of the security?
6 presupposes you know what those necessary 6 A. Or no reason to disbelieve it, I
7 questions are. 7 guess is the -- I would phrase it that
8 A. I guess I would ask the 8 way.
9 questions that were asked -- if I were in 9 Q. Why don't you rephrase it the
10 that business, which I'm not, I guess I 10 way you think it's correct.
11 would ask the questions that were asked of 11 A. That there's no reason to
12 the class representatives to see if they 12 believe that prices are distorted by fraud
13 would give the same answers as the class 13 or misrepresentations or manipulations.
14 members whose answers I reviewed based on 14 Q. So I'll make sure --
15 their sworn testimony. 15 A. For example.
16 Q. But what question -- what 16 Q. -- I have this right, to rely on
17 evidence would show that someone did or 17 the integrity of the market price is to
18 did not rely on the integrity of the 18 have no reason to believe that prices are
19 market price? 19 distorted by fraud or misrepresentations
20 A. As I said, I would think I would 20 or manipulations?
21 copy the questions that were asked of the 21 A. As an example, correct.
22 class representatives in the testimony 22 Q. Can you think of any other
23 that I reviewed because I thought those 23 examples?
24 answers were very revealing. 24 A. You know, maybe depending upon
25 Q. What answers are those? 25 the context that the price is not
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2 A. Well, I quote them in my report, 2 sufficiently liquid, to be confident that
3 which I can find if you want me to. And I 3 the trading prices reflect fair market
4 also saw -- 4 value. That's another example that comes
5 Q. What do they relate to? Does it 5 to mind.
6 relate to where they live? What's the 6 Q. So if -- as long as a purchaser
7 issue that you think hinges on the 7 has no reason to believe that prices are
8 integrity -- their reliance on the 8 distorted by fraud, misrepresentation,
9 integrity of the market price? 9 manipulation, or illiquidity, they rely on
10 A. You know, I think the simplest 10 the integrity of the market price; is that
11 thing for me to do is to refer to the 11 a fair statement?
12 testimony that I quoted which was not 12 A. No, I said those are examples of
13 based on where they live but rather based 13 situations where --
14 on why they purchased, what they 14 Q. Well, let's just --
15 understood when they purchased, and that 15 A. Let me just finish.
16 to me demonstrated, with respect to those 16 Those are examples where
17 class members as well as an additional one 17 investors could, assuming that those
18 that I became aware of subsequent to the 18 things did not -- were not expected to
19 time of my rebuttal report. 19 distort market prices at the time of a
20 Q. What does it mean to rely on the 20 purchase, that would be -- those would be
21 integrity of the market price? 21 examples of situations where investors
22 A. It means that market prices 22 could rely on the integrity of market
23 reflect the true value of the underlying 23 prices.
24 securities or an expectation that they do. 24 Q. Now, let's put this in the
25 Q. So to rely on the integrity of 25 context of our litigation here.
22 (Pages 82 - 85)
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2 A. Okay. 2 category.
3 Q. With Robinhood. 3 MR. ROSEN: I'm going to
4 When you are evaluating a class 4 introduce a new exhibit.
5 member's reliance on the integrity of the 5 (Whereupon, a Seeking Alpha
6 market price here, besides 6 article dated February 1, 2021
7 misrepresentations, fraud, manipulation, 7 was marked Exhibit 115
8 or illiquidity, are there any other things 8 for identification.)
9 that could cause a class member not to 9 Q. This is an article that you
10 rely on the integrity of the market price 10 mentioned in footnote sixty-four of your
11 in this case? 11 opening report.
12 A. Well, again, I would just quote 12 A. Okay.
13 the answers by the class representatives 13 Q. So paragraph twenty-eight in
14 that believe prices have increased because 14 your report, you offer the opinion that
15 of a short squeeze, believe that prices 15 artificial prices caused by short squeezes
16 have increased so far without a reason and 16 are temporary and tend to be unrelated to
17 therefore are not expected to continue to 17 company news, performance, and prospects.
18 increase for fundamental reasons. Those 18 And then you quote a commentator and
19 are the things that come to mind based on 19 there's a footnote.
20 my recollection of the testimony of class 20 Is this article introduced as
21 members. 21 Exhibit 114 the basis for your opinion in
22 Q. And why does knowledge of a 22 paragraph twenty-eight?
23 short squeeze -- why does knowledge of a 23 A. Paragraph twenty-eight of my
24 short squeeze render a person's reliance 24 opening report?
25 on the integrity of the market -- why does 25 Q. Yes.
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2 it mean that they did not rely on the 2 A. That's the article that's cited
3 integrity of the market if they have 3 at the end of the paragraph.
4 knowledge of the short squeeze? 4 Q. Do you have any other support
5 A. Well, more generally if they 5 for the proposition that you make in
6 have knowledge of artificial prices, all 6 paragraph twenty-eight other than this
7 the massive amount of publicity to that 7 footnote sixty-four?
8 effect during the preclass period, what it 8 A. Yes. Squeezes are a form of
9 means is that prices are inflated for 9 distorted market prices. I should say
10 those reasons and anybody who purchased at 10 squeezes have the capability to create
11 a time when they know that prices are 11 distorted market prices and that's a
12 inflated, then they are not purchasing 12 widespread understanding, that's not just
13 based on the integrity of the market 13 the product of this particular article.
14 price, they're purchasing based on 14 Q. And is it your opinion that, in
15 speculation of how long artificial prices 15 this case for these nine affected stocks,
16 are going to continue and whether they 16 there was a short squeeze that caused
17 will be able to profit from those 17 these prices to go up?
18 artificial prices by selling at an even 18 A. I think I've discussed that at
19 higher artificial price than the price 19 length earlier. There was certainly a
20 that they purchased, and that's why 20 perceived short squeeze, and even some of
21 individualized inquiry is necessary to 21 the class representatives talked about
22 distinguish between class members like the 22 trying to profit from a short squeeze. So
23 class representatives who testified to 23 that's what I would say.
24 what I just said versus other class 24 Q. And is it your opinion that the
25 members who do not fall into that 25 stock price declines for the nine affected
23 (Pages 86 - 89)
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2 stocks during the class period was caused 2 communicate at the appropriate time.
3 in part by the dissipation or the end of 3 Q. So did the termination of a
4 the short squeeze? 4 short squeeze cause stock prices to
5 A. I think I answered that again 5 decline on January 28, 29, or any other
6 already. It's the existence of the 6 day during the class period?
7 extreme artificial prices that was caused 7 A. I answered that question
8 in part by the perception of a short 8 multiple times. I think there were a
9 squeeze that was by definition temporary 9 combination of things that occurred,
10 and therefore would result in those price 10 various actions by different market actors
11 increases declining, which is exactly what 11 that I describe in my report, as well as
12 occurred. 12 the inherent temporary nature of
13 Q. So you're saying that prices 13 artificial price movements in this
14 would decline even if there's a perception 14 particular case where a perceived short
15 of a short squeeze whether or not there 15 squeeze was one of the main reasons at the
16 actually was a short squeeze? 16 time that was given to explain the extreme
17 A. No, I'm not saying that. 17 price movements and volatility that
18 Q. Well, it says in paragraph 18 existed between January 4 and January 27,
19 twenty-eight, "short squeezes typically 19 particularly on the day of January 27.
20 don't last long. The average short 20 Q. I think my question was about
21 squeeze in this data set lasted 21 whether the termination of the short -- of
22 approximately twelve days". And that 22 a short squeeze caused stock prices to
23 "when a short squeeze eventually exhausts 23 decline during the class period.
24 itself, the stock price declines by fifty 24 MR. ORSINI: That's not a
25 percent within the next three to four 25 question, that's a statement.
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1 D. R. Fischel 1 D. R. Fischel
2 days". 2 Q. And so I'll repeat the question
3 So why did you include that 3 for you.
4 information in your paragraph 4 Did the termination of a short
5 twenty-eight? 5 squeeze cause stock prices to decline
6 A. Because I think it was important 6 during the class period?
7 to highlight that artificial price 7 MR. ORSINI: Asked and answered
8 movements such as the ones that occurred 8 repeatedly.
9 between January 4 and January 27, 9 THE WITNESS: I'm just going to
10 particularly on January 27, are by nature 10 repeat what I said multiple times. I
11 temporary, by definition temporary, and 11 think there are multiple factors that
12 widely understood to be such. And that 12 occurred during the class period that
13 was not only widely understood at the time 13 resulted in a decline, the actions of
14 but also is something that's widely 14 a lot of economic actors plus the fact
15 understood in the academic literature. 15 that the price increases in the
16 Q. So you want the court to make an 16 preclass period were widely understood
17 inference that the perceived short squeeze 17 to be temporary and were inevitably
18 as the cause of the price rise on the 18 going to dissipate over time.
19 twenty-seventh and also the decline on the 19 Q. You said there were multiple
20 twenty-eighth; is that right? 20 factors that occurred during the class
21 A. No, it's not exactly right. 21 period that resulted in the decline of
22 First of all, I don't have any opinion 22 share prices.
23 about wanting the court to make 23 True so far?
24 inferences. I have an opinion on what I 24 A. Correct.
25 think occurred, which if asked I will 25 Q. Let's list each factor.
24 (Pages 90 - 93)
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2 A. It's the actions by all the 2 artificial inflation that gets
3 different economic actors that I described 3 dissipated over additional days, but
4 in my report, combined with the fact that 4 as a starting position, as a first
5 the price increases that occurred, the 5 approximation those prices on
6 artificial price increases that occurred 6 February 5 are a good initial
7 between January 4 and January 27, 7 approximation of the true value on
8 particularly on the day of January 27 are 8 January 27.
9 by definition were temporary or widely 9 Q. So Exhibit 115 is a Seeking
10 understood to be temporary, widely 10 Alpha post by a guy Hugh Akston; is that
11 commented on to be temporary, and 11 right?
12 therefore would inevitably dissipate over 12 A. I'm looking at it on the screen,
13 time and over some relatively short 13 a title of an article by Mr. Akston.
14 interval, as the article in paragraph 14 Q. Well, it actually says Hugh
15 twenty-eight reflects. 15 Akston Investments.
16 Q. Other than the article in 16 Do you know who wrote it?
17 paragraph twenty-eight, can you cite any 17 A. No, I don't, I just know what's
18 specific evidence that the termination of 18 on the screen. Unless the text of the
19 a short squeeze caused share prices to 19 article which I don't have in front of me
20 decline during the class period? 20 says something additional to what's on the
21 MR. ORSINI: Mischaracterizes the 21 screen.
22 document, and it's been asked and 22 Q. Was this article published in
23 answered. 23 any academic journal or industry journal?
24 THE WITNESS: I don't really 24 A. I actually don't know what the
25 have anything to add to what I've 25 -- what Seeking Alpha, whether that's an
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1 D. R. Fischel 1 D. R. Fischel
2 already said multiple times. 2 industry or academic journal. I'd have to
3 Q. I guess that's a no. All right. 3 look.
4 You said that the prices of 4 Q. Did you make any effort to see
5 these nine affected stocks was 5 if Hugh Akston Investments is actually a
6 artificially inflated as of January 27; is 6 real money management firm?
7 that right? 7 A. No, I didn't. If I had it in
8 A. Yes, that's what I said, 8 front of me, I might be able to tell you,
9 particularly the seven that I focused on, 9 but I didn't make any independent
10 but really all nine. 10 investigation of that.
11 Q. What was the true value of those 11 Q. Did the retail investors who
12 prices on January 27? 12 were active on social media, you know,
13 MR. ORSINI: We're going in 13 Reddit, Wall Street Bets, who were buying
14 circles here. You've asked that 14 these nine affected stocks during the
15 question three times. 15 preclass period, did they manipulate the
16 THE WITNESS: You know, I've 16 stocks?
17 answered that as well. As I said, I 17 A. Well, again, as I've indicated,
18 didn't perform a specific calculation 18 I'm not making a commentary on everyone in
19 as of January 27, but the price 19 the class. My analysis focuses on the
20 subsequent to the end of the class 20 existence of class members who suffered a
21 period when the -- all the alleged 21 loss and for that to occur when they had
22 wrongdoing ended is an indication of 22 to purchase and the publicly available
23 the true value a couple of days 23 information during the time of those
24 earlier on January 27. Not a perfect 24 purchases coupled with the actual
25 indication because there's remaining 25 testimony of several of the class members
25 (Pages 94 - 97)
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2 all of which is described in my report. 2 AFTERNOON SESSION
3 And with respect to the 3 April 12, 2023
4 testimony, I would say that some of the 4 1:56 p.m.
5 testimony indicates class members 5 D A N I E L R. F I S C H E L, having
6 attempting to profit from a manipulation 6 been previously duly sworn by a
7 as opposed to themselves causing a 7 Notary Public of the State of
8 manipulation. 8 New York, upon being examined,
9 Q. What was the manipulation? 9 testified as follows:
10 A. The perceived short squeeze. 10 EXAMINATION CONTINUED BY
11 Q. So is it your opinion that, when 11 MR. ROSEN:
12 investors purchase stock in the hope of 12 Q. Earlier you said that the prices
13 causing it to go up or the hope that it 13 for the nine affected stocks were
14 will go up because of there being great 14 overvalued or artificially inflated as of
15 short interest, that is manipulation? 15 January 27; is that correct?
16 MR. ORSINI: I object to form. 16 A. Yes, basically correct.
17 THE WITNESS: I mean, I don't 17 Overvalued in the sense that the price
18 know if that's meant to be a 18 movements between January 4 and January 27
19 characterization of my previous 19 and particularly on January 27 were
20 answer, but if it is, it's not an 20 artificial price movements that were
21 accurate one. And the answer to your 21 widely understood to be temporary in
22 question is no, I would not say that 22 nature.
23 by itself that's manipulation. 23 Q. And you also said that people
24 Q. Well, you say that there was 24 purchasing during the preclass period
25 testimony indicating class members 25 between January 4 and -- well, you said
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2 attempted to profit from the manipulation. 2 people purchasing during the preclass
3 What manipulation are you 3 period were aware that the prices were
4 referring to? 4 distorted or artificially inflated; is
5 A. The testimony itself -- I think 5 that right?
6 rather than to continue to paraphrase it, 6 A. No, that's not right.
7 I'll find it and read it to you. 7 Q. Well, what was the basis for
8 Q. Please. 8 your statement that class members --
9 A. Actually, can we take a 9 certain class members were not entitled to
10 one-minute break? 10 a presumption that they relied on the
11 MR. ORSINI: Why don't we break 11 integrity of the market price?
12 for lunch. It's been sitting out 12 A. Because -- and just to be clear,
13 there for a while. 13 I was not making a statement about every
14 (Lunch recess taken at 1:01 14 class member as your previous question
15 p.m.) 15 suggested -- but that if you look at the
16 16 timing of when investors had to purchase
17 17 in order to purchase at a loss, that a
18 18 significant percentage of class members
19 19 purchased during a time when there was
20 20 extensive commentary about the existence
21 21 of artificial prices because of a
22 22 perceived short squeeze and the excessive
23 23 social media speculation, and that was
24 24 confirmed, at least with respect to
25 25 several class representatives, by their
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2 testimony which I quote in my rebuttal 2 only purchased at a time of artificial
3 report where they describe the reasons why 3 prices but purchased because of the
4 they purchased and what their expectations 4 existence of artificial prices,
5 were. 5 demonstrating that for those class
6 Q. Is it your opinion that anyone 6 members, they did not rely on the
7 purchasing during the period January 4 to 7 integrity of the market price as was
8 January 27 should have been aware that the 8 confirmed by the testimony that I
9 prices were artificially inflated? 9 quote in my rebuttal report of several
10 A. No, it's not my testimony. 10 of the class representatives. And as
11 Q. Is it your opinion that anyone 11 I said, there's another class member
12 purchasing during the period January 23 to 12 whose testimony that I received after
13 January 27 should have been aware that the 13 the time of my rebuttal report which
14 prices were artificially inflated? 14 where the testimony was basically the
15 A. No. I don't express any opinion 15 same thing.
16 on what investors should have been aware 16 Q. Now, would you agree that a
17 of or should have done. My only opinion 17 large number of the shares purchased in
18 is that during the time when a significant 18 the preclass period were purchased by high
19 percentage of class members had to 19 frequency traders?
20 purchase in order to sell at a loss, there 20 A. I would neither agree nor
21 was extensive commentary and publicly 21 disagree with that statement. I don't
22 available information from multiple 22 know.
23 sources about the existence of artificial 23 Q. So do you know what high
24 prices as confirmed by the testimony of 24 frequency trading is?
25 several of the class representatives and 25 A. Yes, I do.
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2 therefore individualized inquiry is 2 Q. Do you know what program trading
3 necessary in order to determine which 3 is?
4 class members relied on the integrity of 4 A. Yes, I do.
5 the market price and which class members 5 Q. What's program trading?
6 did not. 6 A. It's algorithmic trading based
7 Q. And why is it important in this 7 on the triggers derived from a program.
8 case that investors have relied on the 8 Q. Isn't it true that a large
9 integrity of the market price when they 9 number of the world's largest financial
10 purchased their shares? 10 institutions engage in program trading in
11 MR. ORSINI: Objection to the 11 stocks in the United States?
12 extent it's calling for a legal 12 A. You know, that's too broad of a
13 conclusion. 13 statement. I wouldn't want to express an
14 THE WITNESS: I was going to say 14 opinion on that one way or the other
15 the same thing. If it's important, 15 without studying the issue.
16 the reason why it's important is 16 Q. So you have no idea what portion
17 because a significant percentage of 17 of the shares traded in the preclass
18 class members purchased at a time when 18 period for these nine affects stocks were
19 there was extensive publicity from 19 traded by high frequency traders?
20 multiple sources about the existence 20 A. Correct, I don't have any
21 of artificial prices and the temporary 21 opinion on that one way or the other.
22 nature of those artificial prices and 22 Q. Now, would high frequency
23 therefore, for those class members who 23 traders be barred from relying on the
24 fit that description, the possibility 24 integrity of the market for some reason,
25 exists that those class members not 25 in your opinion?
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2 MR. ORSINI: Objection. Vague. 2 of -- under the facts and
3 To the extent it calls for a legal 3 circumstances of this case, the issue
4 conclusion. 4 of reliance on the integrity of the
5 THE WITNESS: I don't know what 5 market price cannot be determined on a
6 that means. I'm not offering any 6 class-wide basis in light of the
7 legal opinions on who is barred, to 7 economic evidence that I've reviewed
8 use your phrase, from -- 8 and I've described at length in my two
9 Q. Relying on the integrity of the 9 reports as well as the testimony of
10 market price. 10 the class representatives that I quote
11 You have an opinion on the 11 in my report.
12 integrity of the market price in this 12 Q. What about momentum traders? If
13 case; right? 13 someone's a momentum trader and buying at
14 A. The opinion that I have is what 14 momentum AMC, GEM on January 26 of 2021,
15 I repeated several times and it's stated 15 are they relying on the integrity of the
16 in my reports. 16 market price or not?
17 Q. So that opinion does not impact 17 A. It would just depend on the
18 -- does not speak to whether or not high 18 relevant facts and circumstances.
19 frequency traders relied on the integrity 19 Q. The relevant fact is a momentum
20 of the market price; correct? 20 trader saw the stock price going up and
21 A. I don't know what you mean does 21 they said, oh, look, it's going up. I'm
22 not speak to, but there's no separate 22 going to buy it because I'm a momentum
23 opinion I have about high frequency 23 trader.
24 traders. 24 Are they relying on the
25 Q. So if somebody was engaged in 25 integrity of the market price or not?
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2 high frequency trading, would they have 2 A. I think it depends on the
3 relied on the integrity of the market 3 relevant facts and circumstances. Are
4 price or not? 4 they aware of all of the articles about
5 A. I don't think you know without 5 artificial prices and they're aware of the
6 investigating the relevant facts and 6 -- they interpret the momentum in light of
7 circumstances. 7 that information, you know, just as one
8 Q. So basically everybody in the 8 question that occurs to me. I think it
9 class you'd have to ask them if they 9 would depend on the relevant facts and
10 relied on the integrity of the market 10 circumstances.
11 price in order for them to get a 11 Q. So is it your opinion that
12 presumption of reliance; is that your 12 anybody who read the media news articles
13 opinion? 13 that you cite as showing, quote,
14 MR. ORSINI: Objection. 14 artificial prices during the preclass
15 THE WITNESS: That also sounds 15 period did not rely on the integrity of
16 like a legal question. 16 the market?
17 Q. Well, you say everyone needs 17 A. That's not my opinion.
18 individual inquiries; is that right? 18 Q. So someone could read these
19 A. I said -- 19 media news articles that you cite as
20 Q. Yes or no, do we need individual 20 indicating artificial prices and still
21 inquiry or not for this issue? 21 have relied on the integrity of the
22 MR. ORSINI: What issue? 22 market?
23 MR. ROSEN: Integrity of the 23 A. You mean is that possible? Yes,
24 market price. 24 I think that's possible.
25 THE WITNESS: I think the issue 25 Q. Under what circumstances would
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2 it be possible? 2 literature that supports that?
3 A. Whether a purchase was based on 3 A. Yes, the fact that --
4 the integrity of the market price as 4 Q. What's that?
5 opposed to trying to profit by the lack of 5 A. -- short squeezes cause a
6 integrity of the market price, as was 6 distortion in prices that are temporary in
7 testified to by the class representatives. 7 nature and therefore anybody who's
8 Q. So if somebody was hoping the 8 purchasing because of an attempt to profit
9 price would go up because there was a 9 by the existence of artificial inflation
10 short squeeze, they were not relying on 10 hoping that the artificial -- the
11 the integrity of the market? 11 existence of artificial inflation not only
12 A. I would say if somebody -- as 12 continues but increases in order to be
13 one of their class representatives 13 able to sell at a profit, that's
14 testified -- was aware that prices were 14 inconsistent with relying on the integrity
15 inflated because of a short squeeze and 15 of the market price. That's relying on a
16 hoped to profit by prices increasing 16 distortion in the market price and hoping
17 further because of the perceived short 17 that the distortion continues and, in
18 squeeze or any other reason, I would say 18 fact, increases.
19 they are not relying on the integrity of 19 Q. Was there an illegal
20 the market price. 20 manipulation of any of the nine affected
21 Q. But if an investor was aware of 21 stocks in the preclass period?
22 the short squeeze but didn't hope to 22 MR. ORSINI: Calls for a legal
23 profit by it, they just wanted to buy the 23 conclusion.
24 stock because it was a momentum trade, 24 THE WITNESS: That's a legal
25 they would have relied on the integrity of 25 opinion, and I don't have any legal
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2 the market price? 2 opinions on that or any other subject.
3 A. You'd have to examine the 3 Q. Do you have any evidence of any
4 relevant facts and circumstances. If 4 manipulation of the prices of the nine
5 somebody's aware but it has no influence 5 affected stocks in the preclass period?
6 on their investment decision, that's a 6 A. My preclass period, I have
7 different situation than the class 7 evidence of a perception that the cause of
8 representative whose testimony I quoted. 8 the artificial inflation was a perceived
9 And I keep paraphrasing the testimony, but 9 short squeeze coupled with excessive
10 it's in footnotes fourteen and fifteen of 10 social media speculation about the
11 my rebuttal report where in footnote 11 abilities created for retail investors by
12 fourteen the testimony is: "I was banking 12 the perceived short squeeze. That's what
13 on there being a short squeeze. Do you 13 my opinions are.
14 mean like" -- question: "Do you mean like 14 Q. And is the perceived short
15 in your own investing you're assuming or 15 squeeze and the excessive social media
16 hoping that there was going to be a short 16 speculation, are either of those
17 squeeze. 17 manipulation?
18 Answer: "Yes. 18 MR. ORSINI: I object to form.
19 Question: "And you were going to 19 THE WITNESS: That's also a
20 make a profit from that. 20 legal opinion.
21 Answer: "I was hoping to, yes". 21 Q. So you're not making the opinion
22 That to me -- that testimony is 22 that the perceived short squeeze or the
23 inconsistent with a reliance on the 23 excessive social media speculation are
24 integrity of the market price. 24 manipulation; is that correct?
25 Q. Do you have any academic 25 MR. ORSINI: I object to form.
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2 THE WITNESS: In terms of a 2 Q. And what if I'm not asking you
3 legal conclusion, that's correct. 3 for a legal opinion, then what?
4 Q. How about as an economic 4 A. Then I would say that there was
5 conclusion? 5 a distortion in prices, a creation of
6 A. Well, the existence of 6 artificial -- extreme price movements and
7 manipulation is a legal concept. So if 7 volatility during the preclass period as I
8 you're defining manipulation in terms of 8 define the preclass period was the product
9 whether prices were distorted, 9 of a perceived short squeeze and excessive
10 artificially inflated -- 10 social media speculation that was by
11 Q. No, the term "manipulation", I'm 11 definition and widely understood to be
12 not talking about distortion, I'm talking 12 artificial price movements that were
13 about manipulation. That was the term. 13 inherently temporary in nature.
14 So are you offering any opinion, 14 Q. You've written on stock market
15 whether it be economic, legal, or any 15 manipulation; isn't that correct?
16 other form, are you offering any opinion 16 A. I have.
17 in this litigation as to whether the 17 Q. And you've defined it, correct,
18 perceived short squeeze or the excessive 18 in your articles?
19 social media speculation was a 19 A. I think you'd have to show me
20 manipulation? 20 what you're referring to, but I think it
21 MR. ORSINI: Objection. Vague. 21 would be more accurate to say I've
22 THE WITNESS: Well, first of 22 discussed the difficulty of defining it.
23 all, the perception is not a 23 Q. Are you able to define it?
24 manipulation, a perception could be 24 A. Again, it's a legal concept, and
25 based on and was attributed to a 25 I'm not offering any legal opinions.
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2 perceived short squeeze. Whether you 2 Q. Have you ever heard the term
3 want to define a short squeeze or not 3 "assumption of reliance on an efficient
4 as a manipulation, particularly since 4 market free of manipulation"?
5 the concept of manipulation -- 5 A. Have I ever heard that term?
6 Q. Well, that's the question. 6 Q. Yes.
7 Do you want to define it as a 7 A. That's not a term, it's a
8 manipulation? 8 phrase. I don't know if I've ever come
9 A. Excuse me, you have to let me 9 across that phrase.
10 finish my answer. 10 Q. Do you know what it means?
11 A manipulation involves not just 11 A. Well, just based on the ordinary
12 an effect on prices but a certain intent 12 usage of the English language, I think I
13 by the actors, you know, things that I 13 know what it means.
14 don't press an opinion about one way or 14 Q. And does it mean the same thing
15 another, particularly since it's a legal 15 as reliance on the integrity of the market
16 opinion. 16 price in an efficient market?
17 Q. So you're not offering any 17 A. Not necessarily, no.
18 opinion as to whether or not there was any 18 Q. Do you offer any opinion in this
19 manipulation in the preclass period in 19 case as to whether Plaintiffs or the class
20 respect to the perceived short squeeze or 20 were entitled to an assumption of reliance
21 the excessive social media enthusiasm? 21 on an efficient market free of
22 MR. ORSINI: Same objections. 22 manipulation?
23 THE WITNESS: Correct, to the 23 A. That sounds like a legal
24 extent you're asking me for a legal 24 opinion. I'm not offering any legal
25 opinion. 25 opinions one way or the other.
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2 Q. So do you know what the class 2 manipulation cases involving futures
3 definition in this case is? 3 markets, and I've been a witness and I'm
4 A. My understanding of the class 4 currently a witness in cases involving
5 definition is in my report. 5 alleged manipulation in equity markets, I
6 Q. And what would your 6 mean apart from this case.
7 understanding be? 7 Q. What's the current -- sorry, go
8 A. I believe it's investors in the 8 ahead.
9 nine stocks who held a position on 9 A. I'd have to check, actually,
10 January 27 and sold at a loss during the 10 look at my CV to the extent I could
11 class period. That's my understanding. 11 remember every alleged cause of action.
12 Q. Do you offer any opinion as to 12 The cases I'm confident without recalling
13 whether -- as to what investors relied on 13 anything specific that some of the equity
14 in selling their shares during the class 14 market cases involved allegations of
15 period? 15 manipulation.
16 A. No. The only opinion that I 16 Q. What's the current case you're
17 offer is the timing and prices of those 17 working on that involves manipulation?
18 sales relative to the timing and prices of 18 A. I'm not going to disclose it.
19 purchases. 19 Q. Have you ever analyzed market
20 Q. Do you offer any opinion as to 20 efficiency using the Cammer factors
21 whether the restrictions imposed by 21 before?
22 Robinhood in the purchase of the affected 22 A. Yes, I'm sure I have.
23 securities induced or did not induce class 23 Q. And is it your opinion that the
24 members to sell their shares during the 24 Cammer factors are a sound basis for
25 class period? 25 determining market efficiency?
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2 A. I don't have any opinion on that 2 A. Again, without offering a legal
3 one way or the other. 3 opinion, I think the extent to which
4 Q. So this being a seller's class, 4 they're a sound factor in economic terms
5 why is the reason for the class members' 5 can vary depending on the relevant facts
6 purchase relevant to this litigation? 6 and circumstances.
7 MR. ORSINI: Objection to the 7 Q. So it depends on the case; is
8 extent it's calling for a legal 8 that what your position is?
9 conclusion. 9 A. On the facts and circumstances
10 THE WITNESS: The reasons why I 10 of the case.
11 think it's relevant is what I've been 11 Q. Did you analyze market
12 describing in my answers to your 12 efficiency for these nine affected stocks
13 questions and explained at greater 13 in this case?
14 length in my reports relevant for my 14 A. Yes, I did.
15 opinion, again not offering any legal 15 Q. Did you use each of the five
16 opinions as to what the court 16 Cammer factors for the nine stocks?
17 ultimately determines is relevant or 17 A. Again, what I did is laid out in
18 not relevant. 18 my report, but I focused on the factor
19 Q. Have you ever testified in a 19 that is -- I think I referred to all the
20 stock market manipulation case before? 20 factors, but I focused on the factor
21 MR. ORSINI: At deposition, 21 that's generally considered to be the most
22 trial, either? 22 important of the Cammer factors, the
23 Q. In any form; submitted a report, 23 relationship between information and price
24 testified live. 24 movements.
25 A. I've certainly testified in 25 MR. ROSEN: I'll ask you to take
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2 a look at a document here. 2 MR. ROSEN: Yes.
3 (Whereupon, a document entitled 3 Q. So that's where your name first
4 In re Initial Public Offering 4 comes up in the document on page
5 Securities Litigation was marked 5 twenty-four. It's actually I think
6 Exhibit 116 for identification.) 6 ninety-seven of the reported decision but
7 Q. So take a look at Exhibit 116. 7 twenty-four of the document.
8 A. What do you want me to take a 8 And it says that "Plaintiffs
9 look at? 9 proffered Professor Daniel Fischel to
10 Q. Well, see if you recognize that 10 opine with respect to the efficiency of
11 document. 11 the markets for six focus cases as
12 A. Well, I certainly recognize the 12 applicable to the three hundred three
13 case, because I was an expert in the case. 13 nonfocus cases".
14 I'm not sure I recognize this particular 14 I guess question one is: Is it
15 document. 15 true that you provided an opinion on
16 Q. This is a decision by Judge 16 market efficiency for six of these three
17 Scheindlin in the In Re IPO Securities 17 hundred nine cases; is that right?
18 Litigation. It's dated January 10, 2009. 18 A. It sounds right and the court is
19 It's published in the reporter 260 FRD 81, 19 saying that that's what I did, so I have
20 Southern District of New York 2009. 20 no reason to disagree. As I said, I don't
21 So you were an expert witness in 21 have a career recollection of exactly what
22 that case? 22 my opinions were.
23 A. I was. 23 Q. Have you ever had a case before
24 Q. And that was a litigation 24 in which there were three hundred nine
25 involving markets for three hundred nine 25 different issuers' stocks being evaluated
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2 different IPOs; is that right? 2 for market efficiency?
3 A. That's right. I thought it was 3 A. It's safe to say this was the
4 three hundred six, but whatever the number 4 only case I've ever been involved in where
5 is, it was approximately three hundred 5 there were three hundred nine consolidated
6 nine. 6 cases.
7 Q. And in that case, did you 7 Q. Now, according to this opinion
8 testify on behalf of the plaintiff class? 8 -- not opinion, this decision -- well,
9 A. I did, plaintiff classes. 9 it's a judicial opinion, I suppose, it
10 Q. And what issues did you testify 10 says that you evaluated the market
11 for them on? 11 efficiency of these stocks using the
12 A. It's more than fifteen years 12 Cammer factors; is that right?
13 ago, so if you show me my testimony, I can 13 A. At least what I'm looking at, I
14 be able to remember more carefully. But 14 don't see where it says that.
15 as I sit here, it had something to do with 15 Q. Well, if you scroll down from
16 the pricing of initial public offerings 16 twenty-four to twenty-five to twenty-six
17 and what happened on the first day and 17 to twenty-six to twenty-seven, she
18 what happened over time in light of the 18 discusses your analysis of the Cammer
19 particular allegations in the case. But 19 factors?
20 beyond that, I just don't recall. 20 A. That's possible. I just don't
21 Q. If you go to page twenty-four of 21 have that on the screen.
22 the PDF document. 22 MR. ORSINI: Where are you
23 MR. ORSINI: What's the page? Is 23 referring to, page twenty-five?
24 it the page on the lower left-hand 24 MR. ROSEN: Twenty-five to
25 corner? 25 twenty-nine, I guess. I guess
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2 twenty-five to thirty. 2 A. No, I don't.
3 THE WITNESS: Where the court's 3 Q. Then you go to the next page,
4 addressing the criticisms by 4 top of the next page, thirty-one. It says
5 Defendants' experts of my analysis; is 5 that "Defendants' expert submitted a
6 that what you're referring to? 6 number of challenges to Fischel's
7 Q. She just goes through the Cammer 7 findings".
8 factors and your analysis of the Cammer 8 A. I see that.
9 factors. She cites your report. 9 Q. Those challenges were
10 A. (Reviewing). 10 unsuccessful; weren't they?
11 Okay. I've read it. 11 A. I believe so.
12 Q. So it's true that you used the 12 Q. And it says, "first they argued
13 Cammer factors to analyze market 13 that because Fischel analyzed share price
14 efficiency for these six focus stocks in 14 movements on a daily basis" -- let's keep
15 the IPO litigation? 15 going.
16 A. Yes. I said I've done that more 16 So let's go to the one that's at
17 than just this particular instance, but 17 the bottom of page thirty-one where it
18 that's what I did here as well. 18 says, "second, Gompers, after examining
19 Q. Now, page thirty, they discuss 19 the twenty-eight days identified by
20 -- the judge in this decision discusses 20 Fischel as having a statistically
21 incorporation of information into share 21 significant price change for Sycamore,
22 price, which is the fifth Cammer factor. 22 concluded that the price moved without the
23 You're familiar with that; 23 release of relevant new information
24 right? 24 twenty-two of those days".
25 A. I am. 25 Now, Gompers is -- is it Paul
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2 Q. Go to page thirty. 2 Gompers, Professor Paul Gompers?
3 A. I'm really bad at this, I 3 A. That's what it is.
4 apologize. It disappeared from the 4 Q. He's at Harvard; right?
5 screen. 5 A. He's at Harvard, yes.
6 MR. ORSINI: That's impressive. 6 Q. So he was trying to point out
7 I think you closed out of it. Good 7 flaws in your analysis; is that right?
8 thing you're better at finance and 8 A. Again, I really have no
9 economics theory. 9 recollection of this. I'm just reading
10 Q. Now, this fifth factor, this is 10 what the court stated.
11 -- it says, "using event study 11 Q. And it says that Gompers
12 methodology, Fischel determined that the 12 examined the twenty-eight days identified
13 focus case shares tended to react 13 by you as having a statistically
14 significantly to unexpected corporate 14 significant price change for Sycamore and
15 events". And then it says, "for each 15 concluded that the price moved without the
16 focus case, Fischel listed examples where 16 release of relevant new information on
17 unexpected information was released to the 17 twenty-two of those twenty-eight days;
18 public and the share price moved in a 18 right? Do you see that?
19 statistically significant manner". 19 A. Yes, I see that.
20 So you did an event study for 20 Q. And it says, "Fischel responded
21 these focus cases; right? 21 that a conclusion of inefficiency does not
22 A. Yes, I'm sure I did. 22 follow merely because significant share
23 Q. And do you recall what process 23 price changes are not always explained by
24 you used to -- how you selected the events 24 known announcements". And it says, "he
25 and exactly how you went about it? 25 argued that most of the daily variation in
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2 stock prices generally is unexplained by 2 that right?
3 market factors, industry factors, or 3 A. Yes, this is the article that I
4 firm-specific news", and it cites footnote 4 apparently cited based on the description
5 one hundred eighty-three to an article by 5 by the court.
6 Richard Roll called R Squared. 6 Q. Are you aware of any subsequent
7 Do you see that? 7 academic literature that would render the
8 A. Yes, I see that. 8 Roll article no longer reliable?
9 Q. Are you familiar with that Roll 9 MR. ORSINI: I object to form.
10 article? 10 THE WITNESS: Well, I haven't
11 A. Well, I haven't looked at it in 11 investigated that. I mean, Professor
12 a long time, but it's a well-known 12 Roll is regarded as a distinguished
13 article, so I'm generally familiar with 13 authority in finance and I myself,
14 it. 14 after having conducted countless event
15 Q. And is it -- so twenty-two 15 studies, have observed the same
16 divided by twenty-eight, let's see what we 16 patterns of R Squared's frequently
17 get, that equals 78.6. So only 11.4 17 fairly low in their explanatory power
18 percent of the news days were explained by 18 of the independent variables in the
19 firm-specific news for Sycamore; is that 19 regression.
20 correct? 20 But other than that, as I said,
21 A. I don't know if it's correct. 21 I haven't done any study of the
22 Q. Well, twenty-two divided by 22 findings, subsequent study of the
23 twenty-eight -- 23 findings in this article.
24 A. No, I'm not quarreling about the 24 Q. If you go down to the bottom of
25 arithmetic. In other words, I can read 25 page thirty-two, other factors, so there's
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2 what the court says. Exactly what my 2 a section on other factors and it looks
3 analysis was and why I said it, it looks 3 like you also evaluated for the market
4 like I was commenting on the low power of 4 efficiency study in the IPO litigation
5 R Squared typically and regression 5 what are called Krogman factors; is that
6 analyses, meaning that the independent 6 right?
7 variables generally have low explanatory 7 A. Maybe I'm looking at the wrong
8 power in understanding stock price 8 page, but at least on the page that I'm
9 movements. That's what I infer from what 9 looking at I don't see that.
10 the court referred to as the authority 10 Q. So you just looked at the
11 that I cited based on that Roll article. 11 additional factors were market
12 Again, I don't have my testimony in front 12 capitalization and bid/ask spread; is that
13 of me. I'm just looking at what you're 13 right?
14 saying the court said. 14 A. Again, that's what's discussed
15 MR. ROSEN: I'm going to show you 15 here in addition to the court's conclusion
16 the Roll article. 16 that the prices -- that I showed that the
17 (Whereupon, a Journal of Finance 17 price of the focus stocks were generally
18 article was marked Exhibit 117 18 responsive to the release of information
19 for identification.) 19 throughout the class period.
20 Q. This is an article by Richard 20 Q. Let's go to the loss causation
21 Roll titled -- in the Journal of Finance, 21 section, page thirty-seven.
22 volume forty-three, issue three. 22 So tell me when you get to the
23 This is the article that you 23 section on loss causation.
24 cite or that the court asserts you cited 24 A. I have the first page of it.
25 in your report in the IPO litigation; is 25 Q. Do you recall what the alleged
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2 manipulation was in the IPO litigation? 2 how that works, that methodology?
3 A. Only in the most general terms. 3 A. Again speaking at a high level
4 It dealt with the pricing of initial 4 of generality because I'm not thinking of
5 public offerings and whether the 5 application of any particular set of
6 allegation was manipulation or something 6 relevant facts and circumstances, is if
7 else, I don't recall. 7 you're trying to estimate what a price
8 Q. So if you go to the top of page 8 would be independent of the act factor
9 thirty-eight, there's a description of a 9 that's affecting prices during the
10 methodology that you used to demonstrate 10 particular period, one way of doing that
11 loss causation. That might refresh your 11 is to estimate what the price would have
12 recollection a bit. 12 been had it performed the same way as a
13 A. All right. I see where the 13 comparable industry index.
14 court describes my methodology. 14 Q. So you assumed that, during the
15 Q. So it says here, "Fischel's 15 class period, it would have performed like
16 second analysis seeks to demonstrate a 16 the index and been subject to market
17 causal link between the tie-in agreements 17 forces and industry forces and you
18 and continued inflation in stock prices". 18 excluded the company-specific events?
19 So does that refresh your 19 A. I'm not sure I'd accept that
20 recollection as to the nature of the 20 paraphrase. You know what the price is
21 manipulation alleged in this case? 21 but you know what the price is in the
22 A. You know, in the most general 22 actual world because of a particular
23 terms. Again, manipulation is a legal 23 factor or events and you're trying to
24 concept which it might be that's what the 24 estimate what the price would be or would
25 allegation was. I'm analyzing the 25 have been in the absence of that factor or
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2 economic evidence. I'm not focused on the 2 event. One way of doing that is to,
3 legal causes of action. 3 again, depending upon the relevant facts
4 Q. And it says that you proposed 4 and circumstances, is to calculate what
5 two theories, the comparable index 5 the price would have been in a but-for
6 approach and the event study procedure; 6 world if the price had behaved the same
7 correct? 7 way that a comparable index behaved over
8 A. That's what it says. 8 whatever period you're trying to measure.
9 Q. And what's the comparable index 9 Q. The other methodology was the
10 approach; do you recall? 10 event study methodology that's mentioned
11 A. Well, I have no recollection, 11 there, event study procedure.
12 actually, other than what the court says 12 How would the event study
13 here, which appears to be quoting me that 13 procedure be used to calculate loss
14 it approximates what the returns on the 14 causation?
15 security would have been had the fraud not 15 A. Well, it looks like under the
16 occurred. 16 facts and circumstances of the IPO
17 Q. Have you ever used a comparable 17 litigation -- which again I'm speaking
18 index approach methodology in determining 18 based on what the court says as opposed to
19 loss causation damages in the last ten 19 a distinct memory myself of what I did --
20 years? 20 but the idea would be that, when you know
21 A. I've used what could be called a 21 actual returns on days that are alleged to
22 comparable index approach many times for 22 be influenced by the alleged fraud,
23 different reasons over the past ten years, 23 substituting the predicted return on those
24 I would say. 24 days based on a regression analysis for
25 Q. Could you explain conceptually 25 the actual return and then just
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2 calculating a true value line on that 2 "consequently, if market participants
3 basis. 3 observe strong demand for a stock by
4 MR. ROSEN: This will be 4 investors as alleged in the instant cases,
5 Exhibit 118. It's a report -- it 5 market participants would likely infer
6 looks like a report that you authored 6 that purchasers have positive information
7 for this IPO litigation. It's dated 7 about the stock. This would cause market
8 January 20, 2004 on the front. That 8 participants to revise their expectations
9 may or may not be the date it's 9 about the value of the stock upwards,
10 signed, I don't know, but that's the 10 causing the price to be higher than it
11 date on the report. 11 would otherwise be".
12 (Whereupon, a document entitled 12 So is there any academic
13 In re: Initial Public Offering Sec. 13 literature that supports that proposition?
14 was marked Exhibit 118 14 A. At least on its face, that's
15 for identification.) 15 simply a statement that if market
16 Q. Just take a look at it and tell 16 participants believe that the value of a
17 me if that's a report that you authored in 17 stock is higher than its market price,
18 or about that time frame. 18 they're going to be, as a general
19 A. It looks like it. 19 statement, inclined to purchase and the
20 Q. What was the purpose of this 20 context of the case, which is coming back
21 report? 21 to me now as I'm looking at what you're
22 A. I'd have to read it to know. 22 showing me is the allegation was that
23 Q. Paragraph seven says, "I have 23 there was an agreement between certain
24 been asked by counsel" -- 24 underwriters to create false demand for
25 A. I see it. 25 these particular stocks through tie-in
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2 Q. It says that you were asked by 2 agreements where sophisticated investors
3 counsel for Plaintiffs to address various 3 would agree to purchase the stocks at
4 issues concerns loss causation in the six 4 particular prices and increase volume and
5 focus cases. 5 demand to create the impression for
6 A. For the limited purpose of class 6 uninformed investors that the informed
7 certification analysis. 7 people in the market believe the stocks
8 Q. You should read the fine print. 8 were undervalued and that would
9 A. It's just a continuation of the 9 communicate information to other market
10 sentence. It's hardly fine print. 10 participants. As I think I said in the
11 Q. So you authored this report? 11 earlier discussion, I just assumed that
12 A. I did. 12 alleged to be true based on the
13 Q. So paragraph twelve, take a look 13 allegations in the case and assuming it to
14 at paragraph twelve. 14 be true, tried to calculate the effect of
15 A. (Reviewing). 15 those agreements for purposes of loss
16 Okay. 16 causation.
17 Q. So it mentions that investors 17 Q. So you're just assuming --
18 who receive information that the value of 18 you're saying that paragraph twelve, that
19 the security exceeds its current market 19 statement, "consequently, if market
20 price will want to buy the security. 20 participants observe strong demand for a
21 That's not controversial; right? 21 stock by investors as alleged in the
22 A. Well, it's a very contested 22 instant cases, market participants would
23 case. Under the facts and circumstances 23 likely infer that purchasers have positive
24 of the case, that was part of my opinion. 24 information about the stock", so that an
25 Q. The next sentence, 25 assumption rather than an opinion?
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2 A. No, that's an opinion based on 2 the Wall Street Journal and you opine that
3 the allegations, assuming the allegation 3 that corrective disclosure did not
4 was true. 4 dissipate all of the inflation, that there
5 Q. So let's go to paragraph 5 continued to be inflation in the stock for
6 fifteen. 6 a longer period of time; is that correct?
7 A. Okay. 7 A. You know, again I don't
8 Q. So that paragraph says that the 8 remember. I'm just interpreting the
9 stock prices of issuers' shares would 9 court's language here, which obviously
10 continue to be inflated as long as the 10 speaks for itself. But it looks like I
11 false and misleading information generated 11 concluded that on the assumption that
12 by Defendants' alleged misconduct 12 prices were inflated by the IPO pricing
13 continued to influence issuers' share 13 with the combined alleged tie-in sales to
14 prices; is that correct? 14 prop up the IPO price that the price
15 A. That's what it says. 15 movements of the stocks discussed in these
16 Q. And it says, the last sentence 16 paragraphs were consistent with the
17 of that paragraph, "indeed, as I explain 17 existence of that artificial inflation and
18 more fully in part four below, the 18 notwithstanding the fact that there was a
19 economic evidence supports plaintiff's 19 Wall Street article -- Wall Street Journal
20 claim that the artificial inflation 20 article on December 6, there were
21 persisted through December 6, 2000 and 21 subsequent investigations of Defendants'
22 thereafter"; is that right? 22 alleged misconduct after December 6 by the
23 A. You're reading it correctly. 23 U.S. Attorney, by NASDAQ, and therefore
24 Q. So just to short-circuit this, 24 it's not correct to treat what occurred on
25 if you go to paragraphs twenty-one and 25 December 6 as a complete disclosure based
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2 twenty-two, the IPO of this -- like say 2 on the liability assumptions that I was
3 for example FirePond stock was in February 3 assuming, complete corrective disclosure.
4 of 2000. And it was your opinion that the 4 Q. You're familiar with the
5 price for this stock was inflated, 5 efficient market hypothesis, I assume?
6 artificially inflated for, I don't know, 6 A. I am.
7 ten months until December 6, 2000; is that 7 Q. Do you believe that the stock
8 right? 8 market is efficient?
9 A. Well, I'm just reading the 9 A. I think that depends entirely on
10 paragraph, and it talks about how the 10 the relevant facts and circumstances of
11 declines in FirePond's stock price are 11 which stock over which time period, but I
12 consistent with the dissipation of some of 12 think generally speaking, stocks traded on
13 the inflation in the absence of any 13 organized exchanges such as the New York
14 corrective disclosure, although the 14 Stock Exchange, it's reasonable to start
15 existence of the inflated prices 15 with an assumption that, absent contrary
16 dissipated over time. That's what the 16 evidence and obviously subject before
17 paragraph says. 17 analysis, that those stocks are more
18 Q. So then if you go to paragraph 18 likely to trade in an efficient market.
19 twenty-seven, the heading in that section 19 Q. Is it possible to manipulate the
20 is empirical evidence supports Plaintiff's 20 stock of an issuer whose stock is traded
21 allegations of continued price inflation 21 in an efficient market?
22 in the six focus case stocks after 22 A. Again putting aside whether
23 December 6, 2000. 23 you're asking me for a legal opinion, but
24 So it looks like on December 6, 24 if you're asking me is it possible for
25 2000 there was a corrective disclosure in 25 prices for stocks that are otherwise
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2 traded in an efficient market, for those 2 as long as those criteria are met, price
3 prices to be distorted by conduct, yes, 3 and value are the same. There could also
4 that's absolutely possible. 4 be private information which suggests a
5 Q. What about stocks that are 5 departure from price and value, at least
6 traded in an inefficient market? Can 6 in the opinions of certain traders.
7 those stocks be manipulated? 7 There's an economic literature
8 A. The same answer about not 8 on the reasons why prices are efficient is
9 offering any legal opinions, but prices 9 because of the consent attempt by market
10 that trade in an inefficient market, those 10 participants, particularly sophisticated
11 prices can be distorted, also. It just 11 market participants, to identify mispriced
12 depends on the relevant facts and 12 securities so arbitrage opportunities are
13 circumstances. 13 eliminated in that process, creating the
14 Q. What does it mean for prices to 14 existence of an efficient market. But as
15 be distorted? 15 has been discussed in the economic
16 A. If, for example, there are false 16 literature, it's something of a paradox,
17 representations about the value of the 17 meaning that, in order for markets to be
18 security being traded, whether the 18 efficient, they can't be perfectly
19 security is traded in an efficient market 19 efficient because if it's perfectly
20 or an inefficient market, that would be an 20 efficient, then there's no incentive to
21 obvious example. 21 search and there has to be an incentive to
22 Q. So the social media enthusiasm 22 search, which is in other words a reward
23 that you referred to in your report, is 23 for finding mispriced securities which is
24 all of it related to a short squeeze or is 24 what eliminates the existence of mispriced
25 some of the enthusiasm unrelated to a 25 securities because of the arbitrage
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2 short squeeze? 2 opportunities that result.
3 A. You'd have to look. As I said, 3 MR. ROSEN: Why don't we take a
4 I didn't do a comprehensive analysis of 4 break.
5 all the discussion on social media, but a 5 (Whereupon a break was taken)
6 lot of it that I'm familiar with was about 6 Q. What are noise traders; do you
7 the situation that institutional investors 7 know?
8 were in because of the short squeeze 8 MR. ORSINI: Sorry, did you say
9 positions that they took and the 9 "noise"?
10 opportunities that that created for retail 10 MR. ROSEN: "Noise", yes.
11 investors. 11 THE WITNESS: That's just -- I
12 Q. What is the difference between a 12 don't know if there's a fixed
13 stock's market price and its value? 13 definition. It's a term that's
14 A. You have to have a definition of 14 usually used for uninformed traders.
15 what "value" means. 15 Q. Were the social media investors
16 Q. Do you have a definition of 16 in these nine stocks noise traders?
17 "value" for a stock? 17 A. As I said, I'm not sure there is
18 A. Well, there's a general 18 a fixed definition of what a noise trader
19 definition of what a fair market value is, 19 is. And what the particular circumstance
20 a price between a willing buyer and a 20 for any trader is would depend on the
21 willing seller where both have reasonably 21 relevant facts and circumstances for that
22 complete information and neither is under 22 trader.
23 a compulsion to buy or sell. That's a 23 Q. Do you know what the term
24 generally accepted definition of fair 24 "investor sentiment" means?
25 market value. So under that definition, 25 A. I think that's similar, meaning
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2 -- it means the sentiment of investors. 2 my rebuttal report.
3 Other than that, I'm not sure how else it 3 Q. And why did you do an event
4 could be defined. 4 study of the class period in your rebuttal
5 Q. In the academic literature, the 5 report?
6 term "noise traders" is often used. 6 A. Because Dr. Werner expressed an
7 Are you familiar with that? 7 opinion that the stocks during the class
8 A. Yes. 8 period traded in an inefficient market
9 Q. Now, in the academic literature, 9 because of the alleged manipulation, and I
10 is it understood that noise traders make 10 didn't think that was an accurate
11 judgment errors in their investment? 11 characterization as I described in my
12 A. You know, you'd have to show me 12 rebuttal report.
13 what academic literature you're referring 13 Q. Why -- so you think that the --
14 to, whether you're talking about 14 well, what was inaccurate about it?
15 individual traders or traders as a class. 15 A. I don't believe that the reasons
16 And again, I'm not sure what academic 16 that the stocks traded in an inefficient
17 literature you're referring to. If you 17 market was because of alleged wrongdoing
18 were doing any study of a particular 18 by the defendants, which was the basis of
19 situation, it would depend on the relevant 19 Dr. Werner's opinion, as I discuss in my
20 facts and circumstances. 20 rebuttal report.
21 Q. Why didn't you address the first 21 Q. So you believe that the stocks
22 four Cammer factors in your opening 22 traded in an inefficient market during the
23 report? 23 class period, but not because of the
24 A. Because I didn't think they were 24 restrictions on the purchase of the
25 particularly relevant for the issues that 25 affected stocks?
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2 I was analyzing. They weren't necessary 2 A. I believe the stocks traded in
3 to my opinion. 3 an inefficient market during the class
4 Q. Let's look at your event study. 4 period because they also fail factor five
5 It begins at paragraph 5 of the Cammer factors, which is generally
6 thirty-three of your opening report; is 6 regarded as the most important of all the
7 that right? 7 Cammer factors.
8 A. Was that a question, I'm sorry? 8 Q. But if a stock is being
9 Q. I was just saying that it looks 9 manipulated, wouldn't the normal test for
10 like your event study's described in your 10 efficiency be affected by that
11 report beginning at paragraph 11 manipulation under certain circumstances?
12 thirty-three. 12 A. I mean, are you asking the
13 A. That's the section of my report 13 abstract or under the facts and
14 that deals with whether the stocks during 14 circumstances of this case?
15 the -- what I refer to as the preclass 15 Q. Let's start with the abstract.
16 period traded in an efficient market. 16 A. I wouldn't say you could draw
17 Q. So we'll focus on the events in 17 that implication necessarily. I think it
18 the preclass period. 18 would depend on the facts and
19 So did you do an event study on 19 circumstances again suggesting that I'm
20 just the preclass period or both the 20 giving a legal opinion on the meaning of
21 preclass period and the class period? 21 "manipulation".
22 A. I did an event study in the 22 Q. Well, now that you mention it,
23 preclass period in my opening report and, 23 let's go to paragraph thirty-eight of your
24 in light of what Dr. Werner stated, I also 24 opening report.
25 did an event study of the class period in 25 A. Okay.
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2 Q. And the second sentence says -- 2 period satisfied all the legal
3 well, the first sentence says, "as 3 requirements for manipulation. I'm not
4 described above, the prices of the 4 expressing any legal opinions on any
5 affected stocks increased dramatically and 5 subject.
6 artificially during the preclass period. 6 Q. The next sentence says, "absent
7 These artificial price increases were 7 Robinhood's and other brokers' action,
8 widely recognized by market participants 8 there is no way to know in the but-for
9 as temporary market manipulations and/or 9 word whether prices would have kept
10 coordinated purchasing by retail traders 10 rising, how long they would have remained
11 due to heightened commentary on social 11 artificially high, and how quickly they
12 media". 12 would have fallen to nonmanipulated
13 So was it your opinion that 13 levels".
14 there were temporary market manipulations 14 So is it your opinion that the
15 in the nine affected stocks during the 15 prices were at manipulated levels?
16 preclass period? 16 A. It's my opinion that prices were
17 A. That is my opinion as to the 17 at artificial levels because of a
18 reasons that were given and widely 18 perception of the existence of short
19 recognized for the causes of the 19 squeezes, which is generally understood as
20 artificial price movements during what I 20 a type of manipulation, as well as the
21 refer to as the preclass period. 21 effect of coordinated purchasing by retail
22 Q. So what are the market 22 investors due to heightened commentary on
23 manipulations you're referring to there? 23 social media.
24 A. Specifically the perceived 24 Q. Let's go back to your event
25 existence of short squeezes in multiple 25 study.
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2 stocks. 2 So to do your event study on the
3 Q. Anything else? 3 preclass period for your opening report,
4 A. With respect to the use of the 4 could you please list -- give me a
5 term "temporary market manipulations", it 5 step-by-step process that you undertook to
6 says, "and/or coordinated purchasing by 6 do the event study?
7 retail traders due to heightened 7 A. The step-by-step process which
8 commentary on social media". 8 is described in appendix C.
9 Q. Is it your opinion that 9 Q. And which sentence is it that
10 coordinated purchasing by retail traders 10 you're referring to in appendix C?
11 was market manipulation in this case? 11 A. The entire first paragraph at
12 A. Again, that's asking for a legal 12 table one. That's a step-by-step
13 conclusion. It's my view that that 13 description of --
14 contributed or was perceived to have 14 Q. So --
15 contributed to the extreme price increases 15 A. A step-by-step description of
16 and extreme increase in volatility during 16 the event study that was used in this
17 what I refer to as the preclass period. 17 case, the regression analysis that
18 Q. But it's not your opinion that 18 produced the event study.
19 coordinated purchasing is market 19 Q. The third sentence of paragraph
20 manipulation? 20 one says, "this is typically done by one,
21 A. Again, that's a legal 21 estimating historical relationship", et
22 conclusion. I'm not offering any legal 22 cetera.
23 opinions one way or another, and I'm 23 So when it says this is
24 certainly not suggesting that any 24 typically done, are you saying this is
25 particular individual in the preclass 25 what was actually done?
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2 A. Yes. If you keep reading in the 2 a separate independent variable during a
3 paragraph, that's exactly what it says. 3 period, as I said, you could call it a
4 Q. So is it fair to say the first 4 control period on an estimation period and
5 thing you did in your event study is you 5 then use that to generate predicted
6 estimated the relationship between the 6 returns during the period in question, in
7 affected stocks' returns, the broad market 7 this case what I refer to as the preclass
8 return, and the returns of various 8 period.
9 industry indices? 9 Q. So I meant to subsume the
10 A. You establish a relationship 10 creation of the market index and the
11 between the returns on a particular 11 industry index as part of the regression
12 security and the returns of the overall 12 analysis.
13 market and industry index during a 13 So first you have create your
14 particular period, you could call it a 14 market and industry index and estimated
15 control period, in this case for the one 15 returns and then you plug that into the
16 hundred twenty trading days prior to 16 regression analysis; is that right?
17 January 1, 2021 and then use that 17 A. No, that's not right.
18 relationship to generate predicted returns 18 Q. Well, tell me what's right.
19 during the forecast period and then 19 A. I'm going to repeat what I just
20 calculate the difference between the 20 said. First you establish a relationship,
21 actual returns and the predicted returns 21 which is not a manner of predicting
22 and then analyze whether that difference 22 returns, you establish a relationship
23 is large enough or not to be deemed 23 between actual movements of the security
24 statistically significant so that it's 24 in question in relation to movements in
25 possible to reject the null hypothesis. 25 the overall market and movements in a
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2 Q. So first you did this regression 2 particular industry index. And once you
3 analysis and you determined which days 3 have that relationship established, you
4 during the preclass period were 4 then use that relationship to generate
5 statistically significant -- had 5 predicted returns during the forecast
6 statistically stock price movements and 6 period, which for purposes of my initial
7 which days didn't; is that correct? 7 report, was the preclass period.
8 A. I'm sorry, I'm not sure it is 8 Q. And then what did you do?
9 correct, the way you formulated the 9 A. Then you can compare the
10 question. 10 predicted returns with the actual returns.
11 Can you repeat it? 11 And once you know what that difference is,
12 Q. So first you performed the 12 in light of the relationship that you've
13 regression analysis and determined which 13 calculated, you're able to determine
14 days during the preclass period were 14 whether the difference between the actual
15 statistically significant and which days 15 return and the predicted return is large
16 were not? 16 enough to be calculated -- is large enough
17 A. But when you say first, that's 17 to be determined to be statistically
18 what's misleading about your question. 18 significant typically at the ninety-five
19 Q. What did you do first? If that 19 percent confidence level, which enables
20 wasn't the first thing, what was the first 20 you to reject the null hypothesis, meaning
21 thing? 21 that you could observe a difference
22 A. You establish a relationship 22 between the actual and predicted
23 between the movements of a particular 23 relationship -- the actual and predicted
24 security and the movements of the overall 24 returns, excuse me, that large solely as a
25 market and a particular industry index as 25 result of chance less than five percent of
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2 the time. 2 during the preclass period.
3 Q. And did you do that? 3 Q. You said Exhibit D or was it
4 A. Yes, that's exactly what we did. 4 appendix D?
5 Q. And then let's see if I've got 5 A. Appendix D, I'm sorry.
6 this right. 6 Q. Now, is the work in appendix D
7 And the results of that is on 7 here, is that what was commonly referred
8 page twenty-three, Exhibit 3? 8 to as the fifth Cammer factor analysis
9 A. Yes. 9 whether stock prices are moving in
10 Q. So once you got Exhibit 3 and 10 response to news?
11 you understood which days were 11 A. I would say Exhibit D in
12 statistically significant during the 12 relation to Exhibit 3 is something that
13 preclass period and which days weren't, 13 can be used to analyze factor five of the
14 then what did you do for your event study? 14 Cammer factors.
15 A. Report all the different results 15 Q. Is that what you did?
16 and calculate a total cumulative residual 16 A. In part.
17 return. 17 Q. Which part?
18 Q. And then was that the completion 18 A. What's included on appendix D.
19 of your event study, just determining what 19 Q. So is appendix D the analysis of
20 days were statistically significant and 20 the fifth Cammer factor then, whether or
21 what days weren't, or was there more to 21 not it's responding to news?
22 it? 22 A. In part. There's also a
23 A. Well, it's the percentage return 23 discussion in my report about all of the
24 on every day for all the different stocks, 24 disclosures by companies, price targets,
25 which days are statistically significant 25 demonstrating that there was a lot of
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2 for all the different stocks, and what the 2 economic evidence demonstrating that price
3 cumulative -- the total cumulative 3 movements were not attributable to new
4 residual return is for all the different 4 value-relevant information about companies
5 stocks. 5 but were only explained by factors
6 Q. But then do you do some analysis 6 unrelated to fundamentals about the
7 to determine whether the share prices for 7 companies, especially the perception of
8 these stocks move in response to news, or 8 short squeezes and the excessive
9 you didn't do that? 9 discussion in social media about the
10 A. You know, that's the analysis in 10 effect of the short squeeze position of
11 appendix D. 11 large institutional investors. I would
12 Q. Was that part of an event study, 12 say all of that information on appendix D
13 your analysis in appendix D? 13 as well as the other information discussed
14 A. An event study is the 14 in my report that I just described is all
15 relationship between events and prices. 15 relevant to the application of factor five
16 The event study itself just tells you what 16 of the Cammer factors.
17 the stock price returns were in relation 17 Q. Now, is it true that before you
18 to the predicted returns under a 18 looked at any of the news, you first
19 particular model. It doesn't tell you 19 determined which days during the preclass
20 anything about events. What the purpose 20 period were statistically significant, had
21 of an event study is to study the 21 statistically significant stock price
22 relationship between events and prices and 22 movements?
23 that's what was done in Exhibit D with 23 A. No, that's not true.
24 respect to information about particular 24 Q. So how did you determine which
25 companies that was publicly disclosed 25 days -- which news days to include in your
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2 event study? 2 movements over some period of days is --
3 A. Every day was included in the 3 which days were statistically significant
4 event study in a particular period. There 4 and which days were not. And what
5 was no choice of days. 5 appendix D does is look at every day
6 Q. Is that how event studies are 6 during that period, whether the days were
7 normally done, you just look at every day 7 statistically significant or not
8 during a particular period? 8 statistically significant, and analyze
9 A. Again, every case depends on the 9 what potentially relevant firm-specific
10 facts and circumstances of that case, but 10 information was disclosed on those days
11 typically I would say yes. 11 based on the search criteria that we used
12 Q. Isn't it highly biased to do the 12 that are described in my report.
13 event study the way you did it? 13 Q. I'm going to give you a chance
14 A. It's not at all biased. It's 14 to give me a yes or no answer here.
15 completely routine and standard. 15 At the time you determined
16 Q. Really? 16 whether news was value-relevant material
17 So isn't it true you identified 17 news for each of these days during the
18 statistically significant days and then 18 preclass period, had you already
19 went to see if there was news on those 19 determined which days were statistically
20 days? Isn't that what you did? 20 significant?
21 A. No, I wouldn't say that's 21 A. It's just not an accurate
22 exactly what we did. 22 description of --
23 Q. Tell me what you did then. Tell 23 Q. You don't want to say yes or no?
24 me what you did. 24 You don't want to tell the truth?
25 A. The model is a model to 25 MR. ORSINI: Okay. Objection.
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2 determine the existence of statistically 2 Argumentative.
3 significant days. You don't know the 3 Q. I'm asking did you know when you
4 existence of statistically significant 4 determined which days had value-relevant
5 days by an I-know-it-when-I-see-it test. 5 news, did you or did you not know whether
6 You have to perform the statistical 6 the stock price had had a statistically
7 analysis to know which days are 7 significant move that day.
8 statistically significant. That analysis 8 A. The analysis with respect to
9 is done in a particular context, and the 9 publicly available news had nothing to do
10 particular context in this case depending 10 whether stocks were -- whether movement of
11 on whether you're looking at the preclass 11 stocks was statistically significant on
12 period or the class period depends on what 12 any particular day. It was an analysis of
13 you're trying to analyze. 13 every day during a particular period. You
14 Q. So when you -- for example, on 14 don't know whether stock prices are
15 January 4 it says there's no 15 statistically significant until you
16 company-specific news. 16 perform the statistical model, but you can
17 Did you make that determination 17 analyze whether information was publicly
18 before or after you had determined which 18 disclosed on every day whether or not
19 days were statistically significant during 19 stock price movements were statistically
20 the preclass period? 20 significant, and that's exactly what we
21 A. I'm trying to figure out the 21 did.
22 best way to make it clear what we did. 22 Q. Do you deny having knowledge of
23 Q. Just tell the truth. 23 whether a day was statistically
24 A. Which is to pick a period of 24 significant or not at the time you made
25 days to analyze whether stock price 25 the determination whether or not there was
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2 value-relevant news that day? 2 Q. So you didn't determine whether
3 A. Yes, I deny that. One thing has 3 news was value-relevant?
4 nothing to do with the other. The 4 A. There was no determination
5 existence of statistically significant 5 whether the news was, in a fact,
6 price movements did not determine or 6 value-relevant. It was every disclosure
7 affect what days we looked for publicly 7 that identified a particular firm, that's
8 available news. 8 what's listed in appendix D.
9 Q. You're not answering the 9 Q. So you're telling me appendix D
10 question. You just avoided the question. 10 lists every news article about every firm?
11 I didn't ask the question 11 A. Every news article putting aside
12 whether it determined, I asked whether you 12 repetitions of the same article other than
13 had knowledge of whether a day's stock 13 articles which attribute price movements
14 price movement was statistically 14 not to firm-specific announcements about
15 significant or not at the time you made 15 the firms but rather -- the lack of
16 the determination that there was or there 16 firm-specific announcements but rather the
17 was not value-relevant news, and you said 17 existence of artificial prices caused by a
18 you're not answering the question. And 18 perceived short squeeze or excessive
19 it's quite obvious from your report that 19 social media discussion about the effect
20 you had knowledge of whether the stock 20 of the short position of institutional
21 price move what is statistically 21 investors in terms of opportunities for
22 significant or not at the time you 22 retail investors.
23 determined whether there was 23 Q. Isn't it true that to do a
24 value-relevant news. So you can either 24 proper event study, one should select the
25 own up to it or obfuscate. 25 event or events to be studied before
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2 So what would you prefer to do? 2 determining whether or not there was a
3 MR. ORSINI: That's not a real 3 statistically significant stock price
4 question. 4 movement on the date of the events?
5 Ask a question and he'll answer 5 A. It's true that you have to
6 it. 6 select a period of time that you want to
7 Q. So who went through and 7 analyze, so that's true. In other words,
8 determined whether there was 8 the event study doesn't analyze a random
9 value-relevant company-specific news in 9 time. There's a period of time that's
10 appendix D? Who did that? Whose job was 10 connected to the facts and circumstances
11 that? 11 of what you want to analyze and you try
12 MR. ORSINI: We covered that this 12 and conduct a regression analysis based on
13 morning. 13 a statistical model that's responsive to
14 THE WITNESS: I think one or 14 the period that you want to analyze.
15 more research assistants attempted to 15 Q. So if I wanted to do an event
16 find every single firm-specific 16 study over a period of a year, I would
17 announcement or SEC announcement -- 17 look at every trading -- I was first
18 information contained in an SEC filing 18 statistically do an analysis and determine
19 that was publicly disclosed for every 19 which days were statistically significant
20 stock on every day. 20 and then I would look at the news for each
21 Q. Did I ask find? I didn't use 21 day and determine whether there's
22 the word "find". I said who determined 22 value-relevant news?
23 whether it was value-relevant. 23 A. That's completely wrong.
24 A. I just told you one or more 24 Q. But isn't that what you did
25 research assistants. 25 here?
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2 A. No. 2 certain criteria for a certain search
3 Q. Didn't you do a regression 3 based on particular sources and
4 analysis and determine which days were 4 information.
5 statistically significant for each day 5 Q. Let's start, page D1, your
6 during this time frame for the preclass 6 report.
7 period? 7 A. Page D1 of my report. Let me
8 A. Yes, but that's a product of the 8 just find it.
9 statistical analysis which is very 9 I have it.
10 different from the description of it that 10 Q. The first row, January 4, 2021,
11 you had in your previous question. 11 this shows whether there was the abnormal
12 Q. So once you knew which days were 12 return and the T statistic, and then it
13 statistically significant, you then looked 13 shows company-specific news.
14 to see if there was news that could be 14 Who determined whether or not
15 considered value-relevant; is that 15 there was company-specific news on
16 correct? 16 January 4, 2021?
17 MR. ORSINI: Asked and answered. 17 MR. ORSINI: Asked and answered
18 THE WITNESS: No, that's not 18 about twenty times.
19 correct. We looked for news on every 19 THE WITNESS: As I've said
20 day, whether or not the result was 20 multiple times, there is standard
21 statistically significant. 21 databases that we use and one or more
22 Q. So when you went to look for 22 research assistants.
23 news on every day to see if there was any 23 Q. So a research assistant
24 value-relevant news, you had already 24 determined whether or not there was
25 determined which days were statistically 25 company-specific news on January 4, 2021?
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2 significant; correct? 2 A. Whether they could identify a --
3 A. No, the two analyses that I'm 3 not whether it's value specific news,
4 trying to describe to you are completely 4 whether it's any news on that day that was
5 separate. 5 publicly announced based on the sources
6 Q. Well, which happens first 6 that we looked at.
7 chronologically? 7 Q. So does appendix D list all of
8 A. I think they happened 8 the company-specific news, every single
9 simultaneously, as they typically do. 9 piece of company-specific news during the
10 Q. Simultaneously? 10 preclass period?
11 A. Yes, I think a statistical model 11 A. That is about developments in
12 does not tell you anything about events. 12 the different stocks as opposed to
13 So if you want to analyze events during a 13 announcements about the stocks that talk
14 particular period, that's a completely 14 about the absence of any explanation for
15 different search than the process of 15 price movements. Those announcements are
16 calculating a statistical analysis of 16 also discussed but are not listed in
17 stock price movements. 17 appendix D because appendix D is conducted
18 Q. Now, who is the person who 18 for a different purpose, and you can see
19 determined whether there was 19 that there are some days with no
20 value-relevant news on each day during the 20 announcements, there's some days with
21 preclass period? 21 announcements, there are announcements are
22 A. You know, as I've stated, the 22 days that are statistically significant,
23 analysis isn't attempting to filter which 23 as well as announcements on days that are
24 days are value-relevant, it's attempting 24 not statistically significant. That's the
25 to report all news articles that satisfy 25 purpose of appendix D.
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2 Q. And who determined whether or 2 part of appendix D. I've described the
3 not the news set forth in -- the 3 model, how the model was created. The
4 company-specific news was value-relevant 4 results of the model --
5 or not? 5 Q. I'm just asking for a name. I'm
6 A. As I said multiple times, the 6 just asking for a name.
7 purpose was not to determine whether the 7 Give me a name.
8 information was, in fact, value-relevant. 8 A. The statistical analysis was
9 I think the term that's used in the text 9 designed by me.
10 is potentially value-relevant, meaning 10 Q. The --
11 that it's a company-specific news 11 A. Excuse me, let me just finish.
12 announcement which could or could not be 12 As I stated earlier, the person
13 value-relevant depending on the nature of 13 who actually did the analysis of pushing
14 the information and the stock price 14 the buttons on the computer to produce the
15 reaction to the announcement of the 15 work product on the model that was
16 information. 16 specified by me that's reported in
17 Q. So you're not the person who 17 appendix D, I don't know the name of that
18 determined whether or not the 18 person.
19 company-specific news that was obtained 19 Similarly, with respect to the
20 from Factiva was value-relevant or not 20 right side of appendix D, the
21 during the preclass period; is that 21 company-specific news, that was derived
22 correct? 22 from data sources that were identified by
23 MR. ORSINI: That 23 one or more research assistants. That's
24 mischaracterizes probably an hour of 24 the answer to your question.
25 testimony on the same question 25 Q. But you don't know their names?
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2 already. 2 A. Not as I sit here, no.
3 If you have something to add, go 3 Q. And what did you do to ensure
4 ahead. 4 that the company-specific news listed in
5 THE WITNESS: That's a 5 Exhibit D was properly listed there?
6 mischaracterization of the analysis 6 A. I looked at all the disclosures,
7 that was performed and the reasons why 7 every single one, and I made a
8 it was performed. 8 determination that they fit the criteria
9 Q. So who is the person who 9 that was established for appendix D, and
10 determined whether or not the news on any 10 recognizing that the process of
11 specific day during the class period was 11 downloading articles from standard
12 value-relevant? 12 databases is a -- just a matter of
13 MR. ORSINI: Literally asked and 13 plugging into the databases to generate
14 answered at least a dozen times. 14 the output on Exhibit D subject to my
15 MR. ROSEN: He hasn't given me a 15 review of every single article that's
16 name. 16 referred to, that's the process that was
17 Q. Who's the name? Give me the 17 used.
18 name. Tell us the name of the person who 18 Q. So on page D1 of appendix D,
19 did this. 19 there are a number of rows that are empty
20 MR. ORSINI: The "this", the 20 under company-specific news, particularly
21 notion that there was a "this" is 21 January 4, 5, and seventh through
22 mischaracterizing the testimony. 22 fifteenth shows no news.
23 Q. Who is the person that did 23 Do you see that?
24 appendix D? 24 A. Correct.
25 A. The statistical analysis is one 25 Q. What did you do to ensure that
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2 appendix D accurately -- was accurate in 2 majority of the price increases for all
3 not listing any company-specific news for 3 nine affected stocks cannot be explained
4 those days? 4 by new value-relevant company-specific
5 A. I trusted our process so that 5 information".
6 relatively, as I said, purely mechanical 6 Did you write that?
7 process of downloading articles and having 7 A. I'm sorry, I'm looking at --
8 results checked and rechecked. 8 Q. Paragraph thirty-six.
9 Q. So you had the research 9 MR. ORSINI: It's the penultimate
10 assistants ensure that all the 10 sentence in that paragraph.
11 company-specific news was listed in those 11 THE WITNESS: And there's a
12 rows where there is nothing listed in 12 footnote after that.
13 appendix D1? 13 So I would say I did a lot of
14 A. I think it's fair to say that I 14 writing in connection with this
15 relied on research assistants to download 15 report. I don't remember if I wrote
16 the standard data sources that I referred 16 this specific sentence as opposed to
17 to, but there's also the relevant facts 17 wanting to highlight the importance of
18 and circumstances of the case. If there 18 this specific sentence as one of the
19 was any discussion in any of the 19 important conclusions of my analysis.
20 voluminous amounts of information that I 20 Q. And paragraph thirty-seven says,
21 reviewed in the complaint, the court's 21 "thus, I find the affected stocks did not
22 opinion, all the analyst reports of other 22 trade in an efficient market during the
23 firm-specific, company-specific 23 class period".
24 information that I saw that wasn't listed 24 Is that because the vast
25 on appendix D, that would have been a red 25 majority of the price increases for all
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2 flag at least to investigate further. I'm 2 nine affected stocks during the preclass
3 not aware that there are any omissions in 3 period cannot be explained by new
4 appendix D for the -- under the criteria 4 value-relevant company-specific
5 that I specified. If anybody points 5 information?
6 anything out that was left out, which is 6 A. Yes, in light of the relevant
7 possible because human error is always 7 facts and circumstances in this case. If
8 possible, I would take that into account 8 you look at Exhibit 3 which is on the next
9 and add it to appendix D. But I don't 9 page which is also part of paragraph
10 think the qualitative conclusions from 10 thirty-six, not the part that you asked me
11 appendix D in light of the facts and 11 to read but it's the introduction to the
12 circumstances described in my report would 12 paragraph that you're referring to, if you
13 be affected even if there were some -- 13 look at January 27 and you look at the
14 even if there was some news on the days 14 price increases on that day -- not price
15 that you mentioned, January 7 to 15 increases, I'm sorry, the increases in
16 January 15, where none of those days was 16 returns on that day for AMC, 298.35
17 statistically significant, whether or not 17 percent going across ranging from I guess
18 there was any company-specific news that 18 480.08 percent is the largest number and
19 were disclosed on that -- that was 19 11.95 percent is the lowest number with no
20 disclosed on that day that our research 20 value-relevant information disclosed on
21 assistants omitted if, in fact, they did 21 that day, I would say that's an
22 omit anything, which I'm not aware that 22 illustration of why this period of time
23 they did. 23 cannot be described as trading in an
24 Q. Now, paragraph thirty-six says, 24 efficient market combined with the other
25 "this review demonstrates that the vast 25 facts and circumstances that I describe in
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2 my report. 2 what you referred me to that the court
3 Q. And what proportion of stock 3 concluded that I demonstrated that
4 price increases, in your opinion, must be 4 there was a clear relationship between
5 explained by the existence of 5 events, information disclosing events
6 value-relevant news for a stock to trade 6 and stock price reactions to those
7 in an efficient market? 7 events.
8 A. I don't know if there's a 8 Q. Have you ever calculated damages
9 particular dividing line. I think it just 9 for a Section 10b case under the Exchange
10 depends on the relevant facts and 10 Act?
11 circumstances. 11 A. I think I was a plaintiff's
12 Q. Is there a range, a guidepost, 12 expert in a jury trial that resulted in
13 anything you can think of? 13 the largest damage verdict in history in a
14 A. Well, I can certainly think of 14 securities fraud trial, the Household
15 what I analyzed in this particular case 15 case, where the -- that verdict was
16 under the facts and circumstances of this 16 largely affirmed but not completely
17 case, but it's function of the nature of 17 affirmed on appeal and then the case
18 the price increases, the commentary about 18 settled for billions of dollars, as I
19 the price increases, the lack of 19 recall. So I was a damage witness, a loss
20 company-specific value information 20 causation and damage witness in that case
21 explaining those price increases, all the 21 and had an opinion on damages, although my
22 commentary by companies and other market 22 opinion was on inflation per share as
23 participants about the lack of 23 opposed to aggregate damages, which was
24 relationship between value-relevant 24 calculated later. And I've done that
25 information for particular companies and 25 analysis many other times, but that was a
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2 the stock price -- increase in returns to 2 particular example that sticks out in my
3 holding particular securities during this 3 mind because it was contested litigation
4 period, the price targets, really all the 4 that resulted in a jury trial and an
5 different facts and circumstances and 5 appeal and then a remand, and then
6 economic evidence that I discuss in my 6 ultimately a settlement.
7 report. 7 I did something similar in the
8 Q. So in the IPO litigation, you 8 Pfizer securities fraud case where I was
9 testified that even though only eleven 9 also a plaintiff's damages expert, I did
10 percent of the days with statistically 10 something similar in the IPO allocation
11 significant stock price increases had 11 cases that you've pointed me to, as well
12 value-relevant news, it was still 12 as a number of other cases that just
13 efficient, but you don't think that same 13 didn't result in testimony. So the answer
14 proportion would hold here, for some 14 to your question is yes, many times. And
15 reason? 15 it's probably the case that there were
16 MR. ORSINI: Objection to form. 16 allegations under Section 10b -- that was
17 Incomplete. 17 your specific question -- but I'd have to
18 THE WITNESS: I'm not sure I 18 check to make sure that that was the case.
19 would compare the circumstances in 19 Q. And did you use the
20 that case, to the extent I remember 20 out-of-pocket method of damages?
21 them, to the circumstances in this 21 A. Again, that's a legal concept.
22 case. And again, I would -- even 22 In all those cases, I calculated inflation
23 though I don't have a clear 23 per share.
24 recollection of everything that I did 24 I've also conducted many
25 and why I included it, I did notice in 25 analyses -- under various assumptions
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2 about what any given assumption about 2 reverse. I think during the class period,
3 inflation per share translates into 3 because of all the factors that I
4 aggregate damages, which depends on, you 4 mentioned earlier, prices got closer to
5 know, factors such as how many members of 5 the true value, not moved further away
6 the class are going to claim, whether 6 from true value, that the artificial
7 there are offsets of gains against losses, 7 prices -- the magnitude of the existence
8 and how to handle ins and outs, different 8 of artificial prices dissipated during the
9 factors that can have an influence on 9 class period at least in part. So at
10 trying to translate inflation per share to 10 least based on my analysis, so far I don't
11 aggregate damages. 11 think there was any artificial deflation
12 Q. So you said that rather than 12 during the class period. I think exactly
13 using the out-of-pocket measure of 13 the reverse, that prices during the class
14 damages, you simply calculated inflation 14 period moved closer to their true value as
15 per share to arrive at damages in these 15 demonstrated by the level of prices
16 10b-5 cases you worked on; is that right? 16 immediately after the class period as I've
17 A. No, that's wrong, I did not say 17 discussed earlier and also as I discussed
18 that. 18 in my reports.
19 Q. Well, what's the relationship 19 Q. So you made no effort to
20 between inflation per share and the 20 determine deflation per share during the
21 out-of-pocket measure of damages? 21 class period; is that correct?
22 A. Again, that's a legal question, 22 A. As I said, that determination is
23 and I'm not expressing any opinion on any 23 really premature in terms of the analysis
24 legal issue. 24 that I've conducted, but based on what my
25 Q. So how would one go about 25 opinion is as of this time, I think price
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2 calculating inflation per share or 2 movement during the class period as a
3 deflation per share in our case here, 3 result of all the different factors that I
4 Robinhood? 4 mentioned earlier dissipated the existence
5 A. You would calculation inflation 5 of artificial inflation that preceded the
6 per share if you felt there was inflation 6 class period so that prices moved closer
7 per share with respect to allegations by 7 to their true value during the class
8 class members. I don't think that issue 8 period, which is the opposite of
9 can be determined at this stage for any 9 artificial deflation during the class
10 particular class member. One would need to 10 period.
11 know more facts and circumstances, 11 And I said, one way to know
12 including whether there's any inflation 12 that, in addition to what happened in the
13 for any class member. But in any event, 13 preclass period, is to ask the question of
14 that determination for me at least at this 14 what happened immediately after the
15 stage is premature. 15 alleged wrongdoing stopped. Did prices
16 Q. Did you make any effort to 16 rebound or the affected stocks did they
17 determine -- did you make any effort to 17 rebound to the January 27 level, and the
18 identify a method for determining the 18 answer is the opposite. For I think eight
19 deflation per share during the class 19 of the nine stocks, they were lower in the
20 period? 20 volume-adjusted price analysis that I did
21 A. Again, if you mean deflation per 21 in my report than they were even during
22 share meaning transaction prices away from 22 the class period, and that combined with
23 true value, that's the way I was using the 23 all the other economic evidence and the
24 term "inflation" or "deflation" per share, 24 relevant facts and circumstances that I
25 from my analysis so far I think it's the 25 describe in my report is inconsistent with
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2 deflation, it's removing artificial 2 hours it's because you've spent five
3 inflation, moving prices closer to their 3 hours asking the same question.
4 true value, to their correct level. 4 But continue, Professor.
5 Q. And it's true that you made no 5 THE WITNESS: I was just going
6 effort to identify any methodology to 6 to say the dissipation of the
7 determine deflation per share in this 7 artificial price increases during the
8 case; is that correct? 8 class period moved prices clear to
9 A. No, that's incorrect. 9 their true value for all the reasons
10 Q. What effort did you make to 10 that I've just said, as well as all
11 identify the methodology for determining 11 the reasons discussed in my two
12 deflation per share according to the 12 reports.
13 plaintiffs' allegations in this case? 13 Q. Now, if Plaintiffs win on
14 A. Well, recognizing that my 14 liability here and your theory that you
15 analysis was for the purpose of analyzing 15 just expounded is not accepted by the jury
16 whether individualized inquiry was 16 or the judge and it's determined that
17 necessary for all the reasons that I 17 Plaintiffs are entitled to damages for the
18 described as opposed to assuming that 18 difference between the value of the stock
19 there was integrity on the market price on 19 on January 27 and the sale prices, how
20 a class-wide basis or that there was an 20 would you go about determining damages?
21 efficient market in either the preclass 21 A. I don't know. If I make those
22 period or the class period, what my 22 assumptions which, as you know, are
23 analysis demonstrates both in terms of 23 completely contrary to my own opinion and
24 stock price movements in the preclass 24 if I were asked to try and apply a finding
25 period and the preclass period as well as 25 by a jury or a court, I would have to know
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1 D. R. Fischel 1 D. R. Fischel
2 all the other economic evidence and facts 2 what the finding was and what it was based
3 and circumstances that I describe in my 3 on and what the evidence was and perform
4 report, that the prices during the class 4 the analysis at that time.
5 period moved closer to their true value 5 Q. So isn't it true that your
6 because the temporary price inflation that 6 opinion that damages are not capable of
7 I described at length began to dissipate 7 class-wide determination a function of
8 during the class period, which is the 8 having to prevail on your theory of
9 opposite of deflation per share if what 9 whether there was artificial price
10 you mean by deflation per share is that 10 inflation prior to the class period?
11 the difference between prices of sales and 11 A. No, I don't think that's true.
12 true value increased during the class 12 First of all, I'm not the ultimate fact
13 period and, in my opinion, it decreased 13 finder, or the court, so I'm not going to
14 during the class period as evidenced by 14 comment on what courts or jurors might
15 the price declines, the fact that the 15 determine in the future. That is
16 price increase is caused by -- 16 something that I'm not offering any
17 Q. You're not answering the 17 opinion on one way or the other. I'm
18 question. You're going on and on and on 18 offering opinions on what I believe based
19 and not answering the question. 19 on the analysis that's conducted in my
20 MR. ORSINI: Yes, he is. 20 reports. And I talk about multiple
21 MR. ROSEN: We're going to have 21 reasons why, in my opinion, it's not
22 to stay the whole seven hours if he 22 possible to calculate damages on a
23 continues to do this. I'm just 23 class-wide basis using a common
24 saying. 24 methodology, not just the one that you
25 MR. ORSINI: If we're here seven 25 mentioned.
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2 Q. Let's go to paragraph forty of 2 Q. Are you offering any opinion as
3 your opening report. 3 to whether or not a presumption of
4 It says, "Plaintiffs have no way 4 reliance is available under affiliated use
5 of disentangling the effects of 5 in this case?
6 confounding events". 6 A. I think that's a question asking
7 A. That's right. 7 for a legal conclusion and I'm not
8 Q. Did you make any effort to 8 offering any legal conclusions.
9 disentangle the effects of confounding 9 Q. Are you offering any opinion as
10 events? 10 to any other presumption of reliance
11 A. No, I didn't, other than to 11 should be made available to the class
12 highlight there are a lot of confounding 12 members in this case?
13 events occurring at the same time. 13 A. That's another legal opinion
14 Q. But you made no effort to 14 that I'm not offering any opinion about
15 identify potential methods to disentangle 15 one way or the other.
16 the effects of confounding events? 16 MR. ROSEN: Let's take a break.
17 A. Other than to say I don't 17 (Whereupon a break was taken)
18 believe there's anyway to do it that's 18 Q. Are you aware that the
19 been demonstrated so far or that I can 19 Securities and Exchange Commission issued
20 think of. 20 a report about the -- I think they called
21 Q. What efforts did you make to 21 it the meme stock event?
22 think of methods to disentangle the effect 22 A. I am.
23 of confounding events? 23 Q. Did you read it?
24 A. I discussed this already. There 24 A. You know, I read parts of it.
25 are actions by multiple economic actors at 25 I'm not sure I read the entire report.
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1 D. R. Fischel 1 D. R. Fischel
2 the time. There is going to be reversion 2 Q. Now, in your rebuttal report at
3 because the price increases were, by 3 table three, you just look at the price --
4 definition, temporary, so that reversion 4 prices of the various affected stocks as
5 was going to occur sometime in any event, 5 of February 5 and you determined that
6 typically in a very short period of time 6 there are no damages based on the fact
7 subsequent to the end of the perceived 7 that the prices on February 5 were lower
8 short squeeze. All those different 8 than the average prices during the class
9 factors were all occurring basically at 9 period; is that right?
10 the same time, and I don't know -- I can't 10 A. No, that's wrong.
11 think of anyway that it's possible to 11 Q. Explain it to me.
12 isolate the incremental effect of each one 12 A. I don't have any opinion about
13 of those factors on the stock price 13 damages that I express in this particular
14 declines during the class period. 14 report.
15 Q. And is it your opinion that 15 Q. So how would you characterize
16 because you can't think of any way to 16 the inference drawn from table three then?
17 disentangle the effects, no one else can? 17 It says that, "thus, immediately after the
18 A. No, that's not my opinion. My 18 trading restrictions were lifted, the
19 opinion is that Dr. Werner has not 19 prices for eight of the nine affected
20 suggested any method for doing so and, 20 stocks did not bounce back to a higher
21 based on what I know now, I think it would 21 level as Plaintiffs' liability theory, if
22 be extremely difficult if not impossible 22 it were true, would suggest".
23 to have a common method that could be used 23 A. And there's a footnote
24 to calculate damages on a class-wide 24 thirty-eight.
25 basis. 25 Q. So this goes to loss causation
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2 then, not damages; is that correct? 2 Werner's analysis is January 27. And
3 A. In the context of this report, 3 since what you find, as demonstrated by
4 it goes to whether there's a common method 4 table three but not just table three, it's
5 that can be used to calculate damages. 5 really the opposite that the price when
6 Q. So the fact that it didn't -- 6 the restrictions stop is even lower than
7 the stock prices didn't bounce back, how 7 -- speaking at a high level of generality
8 does that relate to a common method to 8 with respect to the nine stocks -- than
9 calculate damages? 9 what the prices were during the class
10 A. Because what Dr. Werner stated 10 period and that is, in my opinion, an
11 was the common method was to compare sale 11 important piece of economic data that's
12 prices during the class period to the 12 inconsistent with Dr. Werner's proposed
13 prices on January 27 because, in his 13 method of calculating damages using a
14 opinion, the proper method was to compare 14 common method.
15 trading prices at a loss with what the 15 Q. So for many of these stocks,
16 price was on January 27, assuming that 16 they ended up going back up subsequent to
17 that's the true value of the stocks. 17 February 5.
18 Now, there's all kinds of things 18 Did you know that?
19 wrong with that as I discuss in this 19 A. As I said, I didn't investigate
20 particular section, but one of the things 20 what happened after February 5 for the
21 wrong with it is the assumption that 21 reason that I stated.
22 January 27 is the true value that damages 22 Q. In the IPO litigation, I believe
23 should be measured against by comparing 23 your opinion was that the stock price --
24 sale prices -- sale price declines 24 prices for those IPO stocks, the three
25 adjusted I think he says for market and 25 hundred nine stocks, the inflation caused
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1 D. R. Fischel 1 D. R. Fischel
2 industry movements to January 27 and for 2 by the manipulation continued for ten
3 the reasons that I state, at least one of 3 months after the misconduct at issue
4 the reasons, there's no basis to assume 4 ceased.
5 that the true value is on January -- for 5 Why couldn't the deflation here
6 these stocks is on January 27 and a lot of 6 by the manipulative conduct continue for
7 reasons to believe the opposite. 7 some longer time period once the
8 Q. So you chose to only look at 8 restrictions were lifted?
9 prices on February 5, 2021 in table three; 9 A. Well, first of all, for reasons
10 is that correct? You didn't go out any 10 I've already stated, I don't accept the
11 further past February 5 to February 6 or 11 premise. Based on what I've seen so far
12 later; is that right? 12 that there was deflation -- I actually
13 A. On this particular table, that's 13 said in my previous answers that it's
14 right. 14 quite possible that the dissipation of
15 Q. Now, why didn't you look further 15 artificial inflation that existed in the
16 than just one day? 16 preclass period could have continue beyond
17 A. I could have, but the main 17 February 5, so that's certainly a
18 reason was the more days you look at, the 18 possibility. And the fact that prices
19 more other factors that can begin to 19 fluctuated after February 5 and prices for
20 influence prices and the day when the 20 some or most of the stocks went up, the
21 restrictions stop that are alleged to be 21 question is whether they went up to the
22 depressing prices, one test of that is to 22 January 27 level or anything close to it
23 look at whether the price after 23 as a result of the cessation of the
24 restrictions stop bounces back to the 24 restrictions and I don't believe that's
25 alleged true value price, which in Dr. 25 the case because there would be
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2 disclosures to that effect if it was the 2 potential class member would have changed
3 case. 3 their trading behavior and therefore
4 Q. So in paragraph thirty-nine of 4 whether or not they would have sustained a
5 your opening report, if you please turn to 5 net gain or loss in the affected stocks in
6 that paragraph, there's an analysis of the 6 the but-for world".
7 trades from some of the named plaintiffs. 7 Those are two related by
8 Did you draft paragraph 8 different points in support of my general
9 thirty-nine of the report? 9 opinion that Dr. Werner has not provided a
10 A. With respect to this particular 10 common methodology that could be used to
11 paragraph, I certainly didn't draft the 11 calculate damages during the class period
12 calculations that are reflected in this 12 without in any way conceding on my part
13 particular paragraph. I think the first 13 that there were any damages.
14 sentence and the last sentence about what 14 Q. So it's fair to say you're not
15 the data show, those were certainly 15 saying that Mr. Gurney or anyone else
16 conclusions of mine. 16 didn't suffer damages based on these
17 Q. Now, in paragraph thirty-nine, 17 calculations; is that correct?
18 it describes the named plaintiff Joseph 18 A. I'm not offering that specific
19 Gurney having purchased some AMC shares, 19 opinion, no.
20 and it lists his average purchase price 20 Q. Now, is it your opinion that the
21 and then the average sale price. And it 21 plaintiffs have to prove what they would
22 says that -- well, I'll read it. It says, 22 have done, what transactions they would
23 "for example, named plaintiff Joseph 23 have -- what sales they would have made
24 Gurney purchased 21.27 AMC shares at an 24 had there been no manipulation?
25 average price of $5.64 on January 26-27, 25 A. Again, I'm not offering any
Page 207 Page 209
1 D. R. Fischel 1 D. R. Fischel
2 2021 and sold the shares at an average 2 legal opinions. My only point is on that
3 price of $8.01 for a gain of $50.39, a 3 particular issue is that there's no way of
4 forty-two percent return, on January 28, 4 knowing what would have occurred in the
5 2021". 5 but-for world. A calculation -- a common
6 So is that -- is your testimony 6 method of calculating damages has to have
7 that Mr. Gurney suffered no damages in the 7 some comparison of what happened in the
8 case because he sold at a gain of $50.39 8 real world versus what would have happened
9 per share? I'm sorry, an average -- 9 in the absence of the alleged wrongdoing.
10 because he made a gain of $50.39? Is that 10 And the particular point that's made in
11 your opinion? 11 this particular section is there's no way
12 A. As I said, I'm not offering any 12 of knowing what would have occurred in the
13 opinion on damages. My opinion in this 13 but-for world in terms of whether class
14 particular paragraph is that given -- as 14 members would have had bigger losses,
15 the first sentence says, "given the 15 whether they would have gained, when they
16 volatile and nonuniform movements of each 16 would have sold, if they would have sold,
17 of the affected stocks during the class 17 and that's all completely indeterminate.
18 period, even small changes in the timing 18 So that's a point that I think is
19 of trades could alter whether an 19 important in this particular section.
20 individual incurred a loss as a result of 20 Q. And how does this case differ
21 a sale and therefore qualifies to be a 21 from any other securities class action
22 potential class member". And if you look 22 where people might have acted differently
23 at the last sentence in the paragraph it 23 had there been no fraud?
24 says, "individualized inquiry would be 24 A. Well, I think it's different in
25 required to determine whether and how a 25 a lot of ways from the typical case where
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2 you know what -- based on a common 2 Why do they have to prove what
3 methodology what the artificial inflation 3 they would have done? They sold. We know
4 was on any particular day and you know 4 what they did. Why do they have to prove
5 what the true value was after a corrective 5 whether they would have sold or not sold
6 disclosure or multiple corrective 6 had there been no fraud? They sold. We
7 disclosures of the alleged misimpression 7 know what they did. Why should they prove
8 created by the alleged false disclosure or 8 something that they didn't do? Can you
9 material nondisclosure. 9 explain?
10 Q. Well, I just want to focus on 10 MR. ORSINI: Asked and answered.
11 that sentence in paragraph thirty-nine, 11 THE WITNESS: That's a
12 your sentence "counterfactually 12 mischaracterization of what's in my
13 speculating as to the timing of trades, 13 report and what I've said. You know
14 whether and when investors would have 14 what happens in the real world. You
15 traded in the but-for scenario in which 15 don't know what would have happened in
16 Robinhood did not put restrictions in 16 the but-for world in order to compare
17 place requires individualized inquiries". 17 the real world relative to the but-for
18 Why is it necessary to prove 18 world.
19 what they would have done in this case had 19 Q. Let's go back to the IPO
20 there been no restrictions? What 20 litigation where you testified for the
21 requirement is there? 21 plaintiffs and you testified that there
22 MR. ORSINI: Well, I object to 22 was these tie-in agreements that caused
23 the extent that that calls for a legal 23 inflation and these plaintiffs purchased
24 conclusion. 24 stock at inflated prices because of this
25 MR. ROSEN: Well, he's made that 25 manipulation.
Page 211 Page 213
1 D. R. Fischel 1 D. R. Fischel
2 conclusion. 2 In that case, did the plaintiffs
3 Q. Tell me why it's necessary to 3 have to prove what they would have done
4 prove this. 4 whether they would have purchased or not
5 MR. ROSEN: He says that this is 5 purchased?
6 -- this required individual inquiry. 6 A. Yes, the calculation would
7 I just want to know why it requires 7 require a determination of the difference
8 individual inquiry. Is it a legal 8 between the purchase price that actually
9 requirement, is it an economic 9 occurred and what the purchase price would
10 requirement? Where does it stand for 10 have been based on an assumption of what
11 and why. 11 would have occurred had the alleged
12 THE WITNESS: I think I've 12 wrongdoing not occurred.
13 answered that question. I'm not 13 Q. But you don't mention sale price
14 offering any legal conclusions. I 14 here. You say speculating as to the
15 think it's relevant on the question of 15 timing of trades, whether and when
16 whether there's a common method that 16 investors would have traded, not purchase
17 can be used to calculate damages 17 price, the timing.
18 during the class period, particularly 18 Now, why did you have to show in
19 whether the opinion that Dr. Werner 19 the IPO litigation exactly when they would
20 has advanced on that issue is 20 have would have purchased those shares at
21 credible, and in my opinion it's not 21 the exact time that they did had there
22 for multiple reasons, including this 22 been no fraud?
23 one. 23 A. Again, I don't want to comment
24 Q. But you haven't answered my 24 on the IPO litigation specifically in any
25 question. 25 detail because it's somewhere between
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2 fifteen and twenty years ago depending 2 would have sold on January 27 at the high
3 upon which report you focus on. 3 price so they would have realized that
4 But as a general matter, 4 value, no evidence that that's a true
5 inflation is usually calculated between 5 value. All the evidence is to the
6 the difference between the actual 6 contrary.
7 transaction price and what the transaction 7 Q. So you're unable to identify a
8 price would have been in the absence of 8 single case, and you acknowledge that the
9 any wrongdoing. 9 plaintiff class in this case have no
10 Q. Isn't it true that you can't 10 obligation to prove that they would have
11 think of a single case in the history of 11 traded in the but-for world, the date they
12 all the work you've done, forty-plus years 12 would have traded, and whether or not they
13 where a plaintiff in a class action had to 13 would have traded had there been no fraud;
14 prove whether and when they would have 14 is that correct?
15 traded in the but-for world? 15 MR. ORSINI: Completely
16 A. I think at least under the facts 16 mischaracterizes his testimony.
17 and circumstances of this case, I'm saying 17 THE WITNESS: When you ask
18 there's no way of knowing whether they 18 whether I have an opinion as to what
19 would have traded that all or if they 19 Plaintiffs would have to prove, what
20 traded in the absence of the alleged 20 they would have an obligation to
21 wrongdoing, whether they would have made 21 prove, I'm not offering an opinion on
22 money or lost money, and I think that's a 22 that one way or another.
23 relevant fact or a relevant criticism of 23 Q. So if they don't have to prove
24 the opinion of Dr. Werner or more 24 whether or not they would have traded on a
25 generally whether there's particularly 25 specific day had there been no fraud, why
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1 D. R. Fischel 1 D. R. Fischel
2 combined with all the other reasons that 2 is it relevant?
3 are discussed in this particular section 3 MR. ORSINI: Asked and answered.
4 of my report, whether there's a -- it's 4 Q. If it has nothing to do with any
5 possible to have a common method to 5 element of proof when they would have
6 calculate damages on a class-wide basis. 6 traded, why do they have to prove it? If
7 Q. Please identify one case, one 7 they don't have to prove it, why is it
8 case in the history of all the work you've 8 even relevant?
9 done in which a plaintiff in a class 9 MR. ORSINI: That's an impossibly
10 action had to prove whether and when they 10 vague question.
11 would have traded in the but-for world. 11 THE WITNESS: And also a
12 A. I didn't say a plaintiff would 12 mischaracterization of what I've said.
13 have to prove it. I just said there's no 13 Relevance is going to be
14 way of knowing under the facts and 14 determined by a court, presumably, not
15 circumstances of this case given the usual 15 by me. It's relevant to my opinion on
16 methodology of comparing an actual 16 whether or not there is a common
17 transaction date with what the transaction 17 method that could be used to calculate
18 price would have been in the absence of 18 damages on a class-wide basis,
19 the alleged wrongdoing. In this 19 particularly when what you were just
20 particular case, that is an additional 20 asking me about is considered in
21 factor, particularly in combination with 21 combination with the other factors
22 the other facts and circumstances that I 22 that are discussed in this particular
23 describe in this particular section that 23 section. Whether a judge ultimately
24 there's no evidence that investors would 24 determines that's legally relevant or
25 have sold -- for example, all investors 25 not relevant is not something I'm
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2 expressing an opinion about one way or 2 requirement. Thin air? What is it?
3 the other. 3 A. The reason why it's a criticism
4 Q. So much of this paragraph 4 is described in my report and I've tried
5 thirty-nine is not even relevant to the 5 to explain to you in my answers which part
6 case; right? Is that what you're 6 of my opinion about why it's impossible to
7 acknowledging? 7 calculate damages using a common
8 A. No, that's not what I'm 8 methodology during this class period at
9 acknowledging. 9 least in comparison with the opinion that
10 Q. So the last sentence of 10 Dr. Werner has expressed.
11 paragraph thirty-nine is, "individualized 11 Q. Can you think of a single other
12 inquiry would be required to determine 12 case that supports -- that you've worked
13 whether and how a potential class member 13 on that supports this claim that you make,
14 would have changed their trading behavior 14 this so-called requirement in paragraph
15 and therefore whether they would have 15 thirty-nine?
16 sustained a net gain or loss in the 16 A. I don't know how to answer that
17 affected stocks in the but-for world". 17 except by repeating --
18 What's the basis for that 18 Q. Just tell me the case. Tell me
19 statement? 19 the case, whatever it is.
20 A. Everything that precedes it in 20 A. The opinion isn't based on case
21 the paragraph combined with the rest of 21 research, it's based on my analysis --
22 the discussion in this particular section. 22 Q. Well, some history, is there
23 Q. So where does this requirement 23 another securities class action that you
24 stem from? Is it a legal requirement, an 24 can point to that had the same
25 economic requirement? What is it? 25 requirement?
Page 219 Page 221
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2 A. It's part of my criticism of 2 A. You know, I don't know of
3 whether or not there's a common method to 3 another case where the maximum artificial
4 calculate damages on a class-wide basis. 4 price is assumed to be the true value
5 Q. I understand it's a criticism. 5 under some assumption that everybody would
6 But is there any basis in the 6 have sold on that price so therefore the
7 case law where there is a requirement for 7 difference between that price and the
8 individualized inquiry as to whether and 8 prices where prices are moving away from
9 how a potential class member would have 9 the artificial price is the assumed common
10 changed their trading behavior? 10 method for calculating damages without any
11 MR. ORSINI: I'm pretty sure that 11 showing of how behavior would have been
12 calls for a legal conclusion. 12 different in a but-for world.
13 MR. ROSEN: Well, he's making one 13 Q. So I'll give you thirty seconds
14 here and I'm trying to understand what 14 to identify a single case that supports
15 the basis for it is. 15 this requirement that you're identifying
16 MR. ORSINI: He's not making a 16 in paragraph thirty-nine. I'll give you
17 legal conclusion. He's already 17 thirty seconds and tell me what you have.
18 testified multiple times. 18 MR. ORSINI: He's answered the
19 Q. So other than it's your 19 question multiple times. If you want
20 criticism, do you have any basis for why 20 to waste thirty seconds, that's your
21 it's a requirement here? 21 prerogative.
22 A. I don't understand the question. 22 MR. ROSEN: Thank you for your
23 Q. Well, you say it's a criticism, 23 time, Mr. Fischel.
24 but where does this requirement stem from? 24 THE WITNESS: Thank you.
25 Just articulate the basis for this 25 (CONTINUED ON NEXT PAGE)
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2 MR. ORSINI: I have no questions. 2 * * *
3 (TIME NOTED: 5:51 p.m.) 3
4 4 INDEX
5 5 WITNESS EXAMINED BY PAGE
6 6 D. R. Fischel Mr. Rosen 3
7 7
8 8 EXHIBITS
9 9 FOR I.D. DESCRIPTION PAGE
10 10 Exhibit 113 Document entitled
11 11 Report of Daniel R.
12 12 Fischel 7
13 13 Exhibit 114 Document entitled
14 14 Rebuttal Report of
15 15 Daniel R. Fischel 53
16 16 Exhibit 115 Seeking Alpha article
17 17 dated February 1, 2021 88
18 18 Exhibit 116 Document entitled
19 19 In re Initial Public
20 20 Offering Securities
21 21 Litigation 122
22 22 Exhibit 117 Journal of Finance
23 23 article 131
24 24
25 25
Page 223 Page 225
1 IN RE JANUARY 2021 SHORT SQUEEZE 1
TRADING LITIGATION 2 I N D E X (continued)
2 4/12/2023 - DANIEL R. FISCHEL 3 E X H I B I T S (continued)
3 ACKNOWLEDGEMENT OF DEPONENT 4 FOR I.D. DESCRIPTION PAGE
4 I, DANIEL R. FISCHEL, do hereby declare 5 Exhibit 118 Document entitled
5 that I have read the foregoing transcript, 6 In re: Initial Public
6 I have made any corrections, additions, or 7 Offering Sec. 138
7 changes I deemed necessary as noted on the 8
8 Errata to be appended hereto, and that the 9
9 same is a true, correct and complete
10 * * *
10 transcript of the testimony given by me.
11
11
12
12 _________________________ _______________
13
13 DANIEL R. FISCHEL Date
14
14 *If notary is required
15
15
16 SUBSCRIBED AND SWORN TO BEFORE ME THIS
16
17 ______ DAY OF ________________, 20___.
17
18 18
19 19
20 __________________________ 20
21 NOTARY PUBLIC 21
22 22
23 23
24 24
25 25
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Page 226
1
2 CERTIFICATION BY REPORTER
3
4 I, Wayne Hock, a Notary Public of the
5 State of New York, do hereby certify:
6 That the testimony in the within
7 proceeding was held before me at the
8 aforesaid time and place;
9 That said witness was duly sworn
10 before the commencement of the testimony,
11 and that the testimony was taken
12 stenographically by me, then transcribed
13 under my supervision, and that the within
14 transcript is a true record of the
15 testimony of said witness.
16 I further certify that I am not
17 related to any of the parties to this
18 action by blood or marriage, that I am not
19 interested directly or indirectly in the
20 matter in controversy, nor am I in the
21 employ of any of the counsel.
22 IN WITNESS WHEREOF, I have hereunto
23 set my hand this 13th day of April, 2023.
24
<%3922,Signature%>
25 Wayne Hock
Page 227
1 IN RE JANUARY 2021 SHORT SQUEEZE
TRADING LITIGATION
2 4/12/2023 - DANIEL R. FISCHEL
3 ERRATA SHEET
4 PAGE_____ LINE_____ CHANGE_________________
5 ___________________________________________
6 REASON_____________________________________
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23 _________________________ _______________
24 DANIEL R. FISCHEL Date
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58 (Pages 226 - 227)
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Case 1:21-md-02989-CMA Document 582-2 Entered on FLSD Docket 06/21/2023 Page 59 of
115
[& - 50.39] Page 1
& 1934 5:19 25:8 28:2 34:3 3
& 1:16 2:8 1980 5:9 34:23 50:22 3 162:8,10
1:56 100:4 51:9,19,23 164:12 185:8
1
2 52:2,11,21 224:6
1 53:24 88:6 57:22 58:3,7
2 54:22 332 3:10
158:17 224:17 58:12,19,23
20 138:8 3922 226:24
1.50 54:23 59:15 61:8,22
10 122:18 223:17 4
62:6,22 64:2
10016 2:5 2000 142:21 4 15:3 16:6
66:18 70:10,25
10019 2:9 143:4,7,23,25 20:9 21:25
71:8,10,21
10:11 1:10 2004 138:8 23:6,20 24:24
74:19 91:9,10
10b 6:5,24 2009 122:18,20 25:8 27:25
92:18,19 94:7
188:9 189:16 2021 1:5 16:7,7 34:2,22 51:8
94:8 95:6,12
190:16 20:9,10 22:2 67:9 91:9
95:19,24 96:8
11.4 130:17 23:6,20 24:24 92:18 94:7
100:15,18,19
11.95 185:19 34:3,23 39:16 100:18,25
102:8,13
113 7:9,13,18 50:23 51:9,19 102:7 167:15
118:10 185:13
224:10 52:2 55:19 176:10,16,25
193:17 196:19
114 53:18,21 60:4 66:18 181:21
202:13,16,22
88:21 224:13 88:6 108:14 4/12/2023
203:2,6 204:2
115 88:7 96:9 158:17 176:10 223:2 227:2
205:22 216:2
224:16 176:16,25 480.08 185:18
275 2:4
116 122:6,7 203:9 207:2,5
28 39:16 60:4 5
224:18 223:1 224:17
60:10,25 61:3 5 55:18 57:21
117 131:18 227:1
61:23 62:15 57:25 58:4,8
224:22 2023 1:10 7:20
67:8 69:15,25 58:10 96:6
118 138:5,14 100:3 226:23
70:11 71:8 181:21 190:16
225:5 21-2989 1:8
72:14 73:13,21 201:5,7 203:9
12 1:10 100:3 21.27 206:24
74:13 92:5 203:11 204:17
122 224:21 23 102:12
207:4 204:20 205:17
131 224:23 26 108:14
29 92:5 205:19
138 225:7 26-27 206:25
298.35 185:16 5.64 206:25
13th 226:23 260 122:19
27 15:3 16:7 50.39 207:3,8
15 183:16
20:10 22:2 207:10
16 7:20
23:6,20 24:24
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Case 1:21-md-02989-CMA Document 582-2 Entered on FLSD Docket 06/21/2023 Page 60 of
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[53 - affected] Page 2
53 224:15 absent 56:18 acknowledging 52:7 90:16
5:51 222:3 145:15 156:6 218:7,9 96:14,24 97:5
6 absolutely act 5:19 6:6 99:9 120:9
146:4 136:8 188:10 124:5 135:12
6 142:21 143:7
abstract 43:6 acted 209:22 157:25 180:13
143:23,24
78:7 153:13,15 action 6:4 205:12 213:8
144:20,22,25
academic 5:13 120:11 135:3 add 34:4 94:25
203:11
50:15 64:10,15 156:7 209:21 179:3 183:9
60604 3:11
64:19 65:2,9 214:13 215:10 addition 19:20
7 74:24 75:19 220:23 226:18 61:12 62:24
7 183:15 76:6,10,19 actions 56:21 133:15 193:12
224:12 91:15 96:23 61:13 62:18,25 additional
78.6. 130:17 97:2 111:25 63:18 69:19,23 83:17 96:3,20
8 132:7 140:12 70:4,19 71:6 133:11 215:20
8.01 207:3 150:5,9,13,16 71:14 73:5 additions 223:6
81 122:19 accept 136:19 92:10 93:13 address 3:9
825 1:17 2:9 205:10 94:2 198:25 139:3 150:21
88 224:17 accepted active 79:24 addressed 38:8
147:24 196:15 97:12 addressing
a
account 63:14 activities 4:18 126:4
a.m. 1:10 183:8 56:25 57:6 adel 36:25
abilities 113:11 accounts 37:25 actors 63:2 adjusted 61:25
ability 4:23 accuracy 39:7 70:5 73:5,7 193:20 202:25
48:25 72:3 39:9 74:3 92:10 admitted 5:5
able 78:4 79:20 accurate 11:21 93:14 94:3 adopting 47:9
87:17 97:8 66:8 70:3 115:13 198:25 advanced
112:13 116:23 98:21 116:21 actual 97:24 211:20
123:14 161:13 152:10 168:21 136:22 137:21 advantage 49:2
abnormal 182:2 137:25 158:21 advocating
176:11 accurately 160:23 161:10 80:2
above 154:4 182:2 161:14,22,23 affect 45:2
absence 62:17 acknowledge 214:6 215:16 170:7
136:25 143:13 216:8 actually 5:20 affected 12:10
177:14 209:9 acknowledge... 10:16 17:7,8 14:23 15:6,19
214:8,20 223:3 36:12 49:19 15:22 16:8
215:18
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Case 1:21-md-02989-CMA Document 582-2 Entered on FLSD Docket 06/21/2023 Page 61 of
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[affected - analyzed] Page 3
18:11 19:4 aggregate 95:21 120:5,11 126:5,8 129:7
20:12 21:23 188:23 190:4 133:25 134:21 131:3 134:16
23:3,4,19 190:11 137:21,22 137:24 139:7
24:22 27:23 ago 56:8 140:4 141:12 145:17 147:4
33:7,25 34:20 123:13 214:2 141:21 142:12 157:17 159:3
38:21 39:17,22 agree 21:20 144:13,22 159:13 160:12
40:13 41:19 22:3 29:22 152:9,17 160:16 163:6
43:3,21 44:19 104:16,20 193:15 203:21 163:10,13
46:24 48:8 141:3 203:25 209:9 164:8,19 167:7
50:21 65:16 agreement 210:7,8 213:11 167:8 169:8,12
67:6 68:13 140:23 214:20 215:19 173:12,18
69:16,24 71:23 agreements allocation 174:4,9 175:16
72:17 73:13,20 134:17 141:2 189:10 175:23 179:6
74:13 75:15 141:15 212:22 alpha 88:5 179:25 180:8
77:7 79:11 ahead 31:24 96:10,25 180:13 184:19
80:21 89:15,25 120:8 179:4 224:16 188:25 191:25
95:5 97:14 air 220:2 alter 207:19 192:10,23
100:13 112:20 akston 96:10 altonaga 1:8 193:20 194:15
113:5 118:22 96:13,15 97:5 ambiguous 194:23 197:4
121:12 152:25 alex 9:7,9 22:5 197:19 204:2
153:10 154:5 algorithmic amc 12:20 60:9 206:6 220:21
154:15 158:7 105:6 60:24 61:3 analyst 50:3
183:13 184:3 allegation 108:14 185:16 182:22
184:21 185:2 134:6,25 206:19,24 analyze 52:5
193:16 201:4 140:22 142:3 amount 87:7 61:18 121:11
201:19 207:17 allegations 7:3 amounts 75:7 126:13 158:22
208:5 218:17 38:3,6,7,10 182:20 164:13 167:13
affecting 136:9 120:14 123:19 analyses 131:6 167:25 168:8
affects 105:18 141:13 142:3 175:3 189:25 169:17 173:7,8
affiliated 3:19 143:21 189:16 analysis 10:7,9 173:11,14
200:4 191:7 194:13 10:18 11:6,25 175:13
affirmed alleged 56:9,9 40:25 45:16 analyzed 47:23
188:16,17 56:18,19,24 52:9,19 57:3 52:16,20
aforesaid 226:8 57:6 58:24 60:12 80:15 120:19 128:13
69:7 80:7 97:19 125:18 186:15
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Case 1:21-md-02989-CMA Document 582-2 Entered on FLSD Docket 06/21/2023 Page 62 of
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[analyzing - articles] Page 4
analyzing 217:3 221:18 163:11,13 argument 35:8
134:25 151:2 answering 164:4,5,6,18,19 argumentative
194:15 43:12,14 170:9 165:12 168:5 169:2
announced 170:18 195:17 171:10 172:8,9 arithmetic
177:5 195:19 177:7,17,17,25 130:25
announcement answers 64:14 179:24 180:2 arrive 190:15
171:17,17 82:13,14,24,25 180:17,20 article 14:5,12
178:12,15 86:13 119:12 181:9,18 182:2 14:17 16:20,23
announcements 205:13 220:5 182:13,25 19:23 20:2
129:24 172:14 anti 7:3 183:4,9,11 25:3,5,18
172:16 177:13 anybody 87:10 applicable 26:25 27:12
177:15,20,21 109:12 112:7 124:12 29:18 30:4
177:21,23 183:5 application 33:19,23 34:18
answer 5:17 anyway 67:8 136:5 165:15 35:16,22 52:14
6:9 10:11 198:18 199:11 apply 196:24 65:14,21 88:6
26:14 31:18,21 apart 120:6 appreciate 74:6 88:9,20 89:2
32:15 33:2 apologize 127:4 approach 89:13 94:14,16
35:2,4,13,20,25 apparently 135:6,10,18,22 96:13,19,22
43:16 69:4 132:4 appropriate 130:5,10,13
72:4,5,18,20 appeal 188:17 92:2 131:11,16,18
98:20,21 189:5 approximately 131:20,23
111:18,21 appears 135:13 90:22 123:5 132:3,8,23
115:10 146:8 appended approximates 144:19,20
168:14 171:5 223:8 135:14 172:10,11,12
180:24 189:13 appendix 17:18 approximation 181:15 224:16
193:18 220:16 17:19,21 18:7 96:5,7 224:23
answered 18:14,21,22 april 1:10 articles 12:7
31:11,23 34:8 19:5,9,19,21 100:3 226:23 13:5,10,11,14
34:24 35:12 20:15,23,25 arbitrage 13:17,19,22,25
43:15 72:2 21:4 22:20 148:12,25 14:9,22,25
90:5 92:7 93:7 23:14 25:10 area 6:2 15:17 16:6,19
94:23 95:17 26:3,8,24 areas 6:18 16:21 17:2,3,6
174:17 176:17 28:14 30:12 argued 128:12 17:13,16,18,20
179:14 211:13 32:23 33:12,15 129:25 17:22 18:2,7,9
211:24 212:10 35:17 157:8,10 18:15,20,25,25
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Case 1:21-md-02989-CMA Document 582-2 Entered on FLSD Docket 06/21/2023 Page 63 of
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[articles - attempted] Page 5
19:2,3,4,10,14 45:23 46:2,7 aside 145:22 assistants 9:12
19:17,23 20:4 46:13,17,23 172:11 31:6 171:15,25
20:9,23,25 48:2,15 50:14 asked 22:24 176:22 180:23
21:2,5,7,15,22 50:18 51:5,21 31:10 34:24 182:10,15
21:25 22:9,17 58:7 61:11 35:9 56:7 82:9 183:21
22:19,20,25 64:7,12,22 82:11,21 91:25 assume 4:19
23:8,9,18,22 66:23 68:9 93:7 94:22 16:12 25:3
24:5,7,11,20,21 69:3 73:3 95:14 138:24 31:5 54:24
25:2,14,15,21 74:16,17 76:17 139:2 170:12 60:20 145:5
25:23 26:3,7,9 76:22 79:18 174:17 176:17 203:4
26:11,15,21,24 81:3,4,7,12 179:13 185:10 assumed
27:6,15,18,20 87:6,15,18,19 196:24 212:10 136:14 141:11
28:4,5,8,11,14 88:15 90:7 217:3 221:4,9
28:19,20,22 91:7 92:13 asking 6:11 assuming 78:6
29:3,8,12,19 94:6 96:2 13:20 16:15 78:7 85:17
30:9,12,13,23 100:20 101:21 24:18 38:15 111:15 141:13
31:2,6,8,9 32:2 102:23 103:21 56:4 63:11 141:17 142:3
32:3,5,10,11,16 103:22 104:2,4 66:21 68:2 145:3 194:18
32:17,22 33:2 109:5,14,20 75:2 78:6 202:16
33:5,6,11,13,16 112:9,10,11 79:13 115:24 assumption
35:18,22 36:3 113:8 116:6,12 116:2 145:23 117:3,20
49:17,23 65:11 142:20 144:17 145:24 153:12 141:25 144:11
109:4,12,19 154:7,20 155:12 169:3 145:15 190:2
116:18 172:13 156:17 172:17 180:5,6 196:3 202:21 213:10
175:25 181:11 192:6,8,11 200:6 217:20 221:5
182:7 193:5,9 194:2 aspects 5:25 assumptions
articulate 196:7 197:9 9:24 10:2,5 68:20 145:2
219:25 205:15 210:3 assert 40:13 189:25 196:22
artificial 19:17 221:3,9 assertion 64:16 attempt 11:10
21:12 26:18 artificially asserts 131:24 26:25 27:11
27:8,22 30:19 79:21 95:6 assist 8:16 49:7 81:17
41:4 42:6,11 100:14 101:4 assistance 112:8 148:9
42:16 43:9 102:9,14 10:19 attempted 24:6
44:6,11,14,22 114:10 143:6 assistant 13:18 35:15 99:2
44:23 45:5,20 154:6 156:11 176:23 171:15
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Case 1:21-md-02989-CMA Document 582-2 Entered on FLSD Docket 06/21/2023 Page 64 of
115
[attempting - big] Page 6
attempting aware 32:8 86:19 87:13,14 beginning 5:12
98:6 175:23,24 33:15 36:3,13 105:6 110:3 70:8 151:11
attorney 36:15 83:18 114:25 117:11 begins 151:5
144:23 101:3 102:8,13 131:11 132:4 behalf 123:8
attorneys 2:4,8 102:16 109:4,5 137:18,24 behaved 137:6
attributable 110:14,21 141:12 142:2 137:7
165:3 111:5 132:6 144:25 168:11 behaving 30:21
attribute 183:3,22 173:12 176:3 behavior 208:3
172:13 200:18 177:5 192:10 218:14 219:10
attributed 47:6 awareness 192:24 197:2 221:11
114:25 81:12 197:18 199:21 belief 81:16
attribution b 201:6 205:11 believe 21:16
47:9,10 208:16 210:2 37:13 56:2
b 224:8 225:3
author 7:21 213:10 220:20 58:14 84:3,12
back 56:5
authored 138:6 220:21 84:18 85:7
58:12,15 66:5
138:17 139:11 basic 14:14 86:14,15 118:8
140:20 156:24
authority basically 39:11 128:11 140:16
201:20 202:7
131:10 132:13 68:20 100:16 141:7 145:7
203:24 204:16
authors 65:15 104:14 107:8 152:15,21
212:19
available 47:24 199:9 153:2 197:18
background
97:22 102:22 basis 37:3 198:18 203:7
39:11,13 61:14
169:9 170:8 88:21 101:7 204:22 205:24
63:3 69:18
200:4,11 108:6 120:24 best 32:24 41:3
bad 127:3
avenue 1:17 2:4 128:14 138:3 72:2 167:22
banking 111:12
2:9 3:10 152:18 194:20 bets 97:13
barred 105:23
average 54:9 197:23 199:25 better 38:8
106:7
54:12,14 55:4 203:4 215:6 58:5,9 127:8
bars 5:5,6
55:8,9,20 217:18 218:18 beyond 12:21
based 32:15
90:20 201:8 219:4,6,15,20 68:19 123:20
39:13 40:25
206:20,21,25 219:25 205:16
43:6 46:9 47:8
207:2,9 bath 12:20 biased 166:12
52:8 55:16
averaged 55:16 bed 12:20 166:14
56:17 57:2
avoided 170:10 began 73:6 bid 133:12
74:22 77:8
avoiding 34:10 195:7 big 72:22
78:17 81:11,15
82:14 83:13,13
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Case 1:21-md-02989-CMA Document 582-2 Entered on FLSD Docket 06/21/2023 Page 65 of
115
[bigger - case] Page 7
bigger 209:14 bubbles 50:18 calculation carefully
billions 188:18 65:16 66:11 72:6 95:18 123:14
bit 20:6 22:5 68:17 76:23 191:5 209:5 case 1:8 7:6 8:9
59:18 134:12 business 4:6 213:6 8:15,21 10:4,5
blackberry 50:22 82:10 calculations 12:18 36:14
12:21 busy 4:12 71:5 206:12 38:4,13 45:9
blood 226:18 buttons 180:14 208:17 45:11 46:10
bloomberg buy 108:22 call 23:7 41:10 51:3 56:11,13
13:16,23 15:2 110:23 139:20 66:20,21,22 56:19 57:15
17:14 18:16 147:23 158:14 160:3 59:3 64:22
22:13 54:19,25 buyer 147:20 called 13:16 86:11 89:15
55:2 buying 80:20 58:19 59:4 92:14 103:8
board 72:23 97:13 108:13 130:6 133:5 106:13 108:3
74:20 c 135:21 200:20 117:19 118:3
bottom 128:17 220:14 119:20 120:6
c 2:2 3:2 100:5
132:24 calling 103:12 120:16 121:7
157:8,10
bounce 201:20 119:8 121:10,13
calculate 70:17
202:7 calls 106:3 122:13,13,22
70:18 137:4,13
bounces 203:24 112:22 210:23 123:7,19
141:14 158:20
bound 64:2,17 219:12 124:23 125:4
162:16 197:22
break 41:8 59:8 cammer 120:20 127:13,16
199:24 202:5,9
59:10 63:11 120:24 121:16 134:21 139:23
208:11 211:17
69:5 99:10,11 121:22 125:12 139:24 140:20
215:6 217:17
149:4,5 200:16 125:18 126:7,8 141:13 143:22
219:4 220:7
200:17 126:13,22 153:14 155:11
calculated
brena 4:5 150:22 153:5,7 157:17 158:15
161:13,16
briefs 50:3 164:8,14,20 160:7 166:9,10
188:8,24
broad 45:6 165:16 167:10 182:18
189:22 190:14
105:12 158:7 capability 185:7 186:15
214:5
brokerage 89:10 186:17 187:20
calculates
38:18 capable 197:6 187:22 188:9
54:25
brokers 156:7 capitalization 188:15,17,20
calculating
bubble 66:14 133:12 189:8,15,18
138:2 175:16
66:19,20 career 5:13 191:3 194:8,13
191:2 204:13
124:21 200:5,12
209:6 221:10
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Case 1:21-md-02989-CMA Document 582-2 Entered on FLSD Docket 06/21/2023 Page 66 of
115
[case - cite] Page 8
205:25 206:3 120:11 140:7 certify 226:5,16 chicago 3:11,22
207:8 209:20 caused 40:19 cessation 4:4,7
209:25 210:19 47:15 61:2 205:23 choice 166:5
213:2 214:11 62:4 88:15 cetera 157:22 choices 29:23
214:17 215:7,8 89:16 90:2,7 chairman 3:25 choose 37:24
215:15,20 92:22 94:19 challenges chose 203:8
216:8,9 218:6 172:17 195:16 128:6,9 chronologica...
219:7 220:12 204:25 212:22 chance 161:25 175:7
220:18,19,20 causes 19:16,16 168:13 circles 95:14
221:3,14 21:11 26:18 change 67:17 circuit 142:24
cases 6:24 7:2 27:8,22 30:18 68:20 75:23 circumstance
120:2,4,12,14 42:5 61:6,19 128:21 129:14 149:19
124:11,13,17 62:13,14 135:3 227:4,7,10,13 circumstances
125:6 127:21 154:19 227:16,19 45:9,10,19
139:5 140:4 causing 98:7,13 changed 208:2 46:10 107:7
141:22 189:11 140:10 218:14 219:10 108:3,18 109:3
189:12,22 caveats 52:18 changes 44:17 109:10,25
190:16 cease 56:25 129:23 207:18 111:4 121:6,9
category 88:2 ceased 205:4 223:7 136:6 137:4,16
causal 134:17 certain 5:24 characterizati... 139:23 145:10
causation 9:24 10:23 66:9 98:19 146:13 149:21
133:20,23 14:14 22:12,13 152:11 150:20 153:11
134:11 135:19 45:11 101:9 characterize 153:14,19
137:14 139:4 115:12 140:23 201:15 166:10 173:10
141:16 188:20 148:6 153:11 characterized 182:18 183:12
201:25 176:2,2 66:12 185:7,25
cause 12:9 certainly 37:4 charlotte 2:11 186:11,16
42:11,16 43:3 40:21 51:4 chart 39:24 187:5,19,21
43:20 46:23 89:19 119:25 check 11:4,10 191:11 193:24
47:7,21 69:14 122:12 155:24 11:14,19 39:6 195:3 214:17
70:12 71:2 186:14 205:17 39:9 120:9 215:15,22
73:12,19 74:11 206:11,15 189:18 cite 75:11,16
86:9 91:18 certification checked 11:18 94:17 109:13
92:4 93:5 139:7 226:2 182:8 109:19 131:24
112:5 113:7
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Case 1:21-md-02989-CMA Document 582-2 Entered on FLSD Docket 06/21/2023 Page 67 of
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[cited - commonly] Page 9
cited 50:14 107:9 108:6,10 196:8 comes 32:12
89:2 131:11,24 110:7,13 111:7 clepic 2:11 55:2 85:4
132:4 117:19 118:2,4 clerking 5:12 124:4
cites 126:9 118:11,14,23 close 50:22 coming 140:20
130:4 118:25 119:4,5 51:18 63:8 commencem...
claim 58:16 123:8 133:19 205:22 226:10
142:20 190:6 136:15 139:6 closed 127:7 comment 79:16
220:13 150:15 151:21 closer 58:5 197:14 213:23
claims 38:13 151:25 152:4,7 192:4,14 193:6 commentary
51:3 152:23 153:3 194:3 195:5 41:22 45:16
clarified 32:23 167:12 179:11 closing 61:22 48:21 49:10
class 6:4 14:7 184:23 190:6 61:23 78:25 97:18
48:3 51:13 191:8,10,13,19 cognition 4:23 101:20 102:21
52:6,22,23 192:2,9,12,13 collected 20:10 154:11 155:8
54:4,6 55:7,10 192:16,21 22:7 25:16 156:22 186:18
55:11,15,17,24 193:2,6,7,9,22 26:12 28:15,24 186:22
56:22 58:21 194:20,22 29:14 33:13 commentator
69:9 75:15 195:4,8,12,14 35:18 88:18
79:4 80:6,7,8 196:8 197:7,10 collecting 29:8 commented
80:10,11,13 197:23 199:14 collection 67:19 69:2
81:2,6,11,13,21 199:24 200:11 16:18 94:11
82:12,13,22 201:8 202:12 column 55:7 commenting
83:17 86:4,9 204:9 207:17 60:3,5 78:25 131:4
86:13,20 87:22 207:22 208:2 combination commission
87:23,24 89:21 208:11 209:13 40:24 92:9 200:19
90:2 92:6,23 209:21 211:18 215:21 217:21 common 61:17
93:6,12,20 214:13 215:6,9 combined 197:23 199:23
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make 11:9,14
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11:20 21:19
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184:22 185:24 109:23 111:14 78:21 79:2,10 meme 71:17
186:7,22 111:14 117:14 79:25 80:5 200:21
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memorized 219:3 221:10 misleading 129:15 192:5
39:25 methodology 142:11 159:18 192:14 193:6
memory 4:23 127:12 134:10 mispriced 195:5 196:8
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moving 164:9 narrowed 145:13 165:3 176:15,25
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125:25 149:16 notion 179:21 observed offering 38:16
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112:25 113:20 8:5,8,11,13,14 original 65:4 159:24 160:25
113:21 114:14 8:17,21 38:16
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overbroad 5:16 paragraph paraphrase 149:19 150:18
overreactions 7:25 8:4 14:19 99:6 136:20 155:25 158:11
65:17 66:12 15:9,12 16:25 paraphrasing 158:14 159:23
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paradox
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pass 17:8 27:15 185:18,19 54:4,6 55:8,10 168:2,6,18
past 135:23 187:10 207:4 55:12,15,17,24 169:13 173:6,9
203:11 percentage 56:22 58:22 173:14,16
patterns 101:18 102:19 64:9 67:15 174:7 175:14
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130:18 161:19 48:16 51:8,13 166:4,8 167:12 phrase 84:7
161:25 185:17 52:7,22,23 167:12,20,24 106:8 117:8,9
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[phrasing - predicting] Page 36
phrasing 18:13 plus 93:14 79:17 109:23 preclass 40:15
pick 167:24 214:12 109:24 110:2 41:5 42:8,12
piece 75:11 pocket 189:20 125:20 145:19 42:17 43:11
177:9 204:11 190:13,21 145:24 146:4 44:7 45:17
pinpoint 68:5 point 24:2 158:25 183:7,8 47:5,16 48:9
place 210:17 25:22 28:23 197:22 199:11 51:8 64:9
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places 64:5 62:19 64:18,23 post 96:10 97:15 100:24
65:3 67:2,21 68:10 postings 49:5 101:2 104:18
plaintiff 123:8 73:17 74:22 49:12,16,20,22 105:17 109:14
123:9 206:18 129:6 209:2,10 potential 19:16 112:21 113:5,6
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plaintiff's points 28:20,21 61:19 62:14 151:21,23
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188:11 189:9 polonsky 9:7 207:22 208:2 155:17,25
plaintiffs 1:15 pontificating 218:13 219:9 157:3 159:4,14
2:4 56:20 34:15 potentially 160:7 161:7
58:16,18 59:3 portion 105:16 21:5,8 26:15 162:13 164:2
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premature 45:19,23 46:11 103:5,9 104:7 193:20 194:19
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43:3,10,20 93:15 94:5,6 186:18,19,21 85:19,23 86:14
44:6,12,13,16 95:19 100:17 187:2,4,11 86:15 87:6,9
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131:8 51:25 52:10,18
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variation want 8:2 21:18 198:4 199:16 whereof 226:22
129:25 23:11 33:19 200:15 208:12 wide 33:13
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vast 15:21 173:6,11,14 we've 41:6 46:12 47:6
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verdict 188:13 211:7 213:23 weeks 45:12 68:7,8,25
188:15 221:19 75:22 91:12,13,14
versus 54:5 wanted 110:23 weighted 54:9 93:16 94:9,10
70:20 74:3 173:15 54:11,13,15,17 100:21 116:11
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view 155:13 184:17 55:12,14,20 widespread
virtue 61:10 wants 77:15 went 17:5 41:22 75:18
volatile 207:16 waste 221:20 26:20 28:3 76:5 89:12
volatility 70:6 way 5:23 18:12 29:2 45:11,24 willing 147:20
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116:7 155:16 31:18,22 33:17 127:25 166:19 win 196:13
volume 54:9,11 37:3 43:15 171:7 174:22 witness 6:8 8:7
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212:16,17,18 123:12 135:20
214:15 215:11 135:23 214:2
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Federal Rules of Civil Procedure
Rule 30
(e) Review By the Witness; Changes.
(1) Review; Statement of Changes. On request by the
deponent or a party before the deposition is
completed, the deponent must be allowed 30 days
after being notified by the officer that the
transcript or recording is available in which:
(A) to review the transcript or recording; and
(B) if there are changes in form or substance, to
sign a statement listing the changes and the
reasons for making them.
(2) Changes Indicated in the Officer's Certificate.
The officer must note in the certificate prescribed
by Rule 30(f)(1) whether a review was requested
and, if so, must attach any changes the deponent
makes during the 30-day period.
DISCLAIMER: THE FOREGOING FEDERAL PROCEDURE RULES
ARE PROVIDED FOR INFORMATIONAL PURPOSES ONLY.
THE ABOVE RULES ARE CURRENT AS OF APRIL 1,
2019. PLEASE REFER TO THE APPLICABLE FEDERAL RULES
OF CIVIL PROCEDURE FOR UP-TO-DATE INFORMATION.
Case 1:21-md-02989-CMA Document 582-2 Entered on FLSD Docket 06/21/2023 Page 115 of
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VERITEXT LEGAL SOLUTIONS
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