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Subprime Lending Litigation

ƒƒ About Analysis Group

ƒƒ Securities and Financial Instruments

ƒƒ Real Estate and Mortgage-Lending Disputes

ƒƒ Class Action Litigation

ƒƒ Bankruptcy-Related Litigation

ƒƒ Accounting Litigation Services

ƒƒ Selected Case Experience

ƒƒ Selected Academic and Industry Experts

ƒƒ Selected Professional Staff

Experience, Qualifications, and Experts

1. About Analysis Group

2. Securities and Financial Instruments

xx Valuation of Derivatives and Other
Complex Financial Instruments
xx Investment Suitability and Risk Assessment
xx Securities Fraud and Stock Price Movements

3. Real Estate and Mortgage-Lending Disputes

4. Class Action Litigation

xx Statistical Sampling for Class Certification

5. Bankruptcy-Related Litigation
xx Fraudulent Conveyance
xx Solvency Analysis
xx Deepening Insolvency

6. Accounting Litigation Services

7. Selected Case Experience

8. Selected Academic and Industry Experts

9. Selected Professional Staff

Analysis Group Subprime Lending Litigation 2

The crisis in the subprime mortgage market has led
to numerous investigations by federal and state regulators and a growing
wave of litigation involving stakeholders at all stages of the lending process.

Disputes continue to arise involving a range of conduct including allegations of:

xx Predatory and discriminatory lending practices;

xx Inadequate underwriting standards and practices;
xx Failure of lenders to meet loan repurchase obligations;
xx Improper accounting methods and inadequate internal controls;
xx Failure to properly value mortgage-backed securities (MBSs) and
collateralized debt obligations (CDOs);
xx Improper credit rating and inadequate disclosure of the risks of
mortgage-related securities.

Analysis Group has longstanding expertise in the disciplines central to evaluating

subprime lending matters – including a deep understanding of the underlying
financial instruments involved and of the operations and practices of the various
participants in the subprime lending market. Our professional staff and affiliated
experts also have significant experience in the analysis of investment suitability
and portfolio risk, claims regarding breach of contract and fiduciary responsibility,
and bankruptcy-related issues.

Our firm has recently been retained in several confidential matters involving
subprime lending in which we are addressing issues including investment suit-
ability, contractual disputes, and disclosure with regard to subprime holdings.
Our experience and qualifications in each relevant area are summarized below.

Analysis Group Subprime Lending Litigation 3

1. About Analysis Group Valuation of Derivatives and Other Complex
Financial Instruments – We are experts in applying
Analysis Group, Inc. is an economics, finance, and sophisticated financial tools to value a broad range
strategy consulting firm with offices in Boston, of financial instruments and derivatives, including
Chicago, Dallas, Denver, Los Angeles, Menlo Park, mortgage and other asset-backed securities. From our
Montreal, New York, San Francisco, and Washington, firm’s earliest days, we have actively participated in
D.C. We have assisted the nation’s largest law firms landmark cases involving complex financial instru-
and many of the top Fortune 500 companies on more ments including collateralized debt instruments and
than 3,500 cases since the company’s founding in 1981. credit default swaps. We have analyzed questions of
risk characteristics and risk transfer for clients includ-
Our staff of more than 475 professionals, most with ing leading investment banks and rating agencies.
advanced degrees in economics, statistics, finance,
accounting, or management, works closely with a Investment Suitability and Risk Assessment – We
large network of academic experts at leading uni- have provided analysis and testimony in a broad
versities. In our work related to subprime lending range of cases involving allegations of breach of fidu-
litigations, we can draw on the expertise of such ciary duty or improper implementation of investment
authorities as Professor R. Glenn Hubbard, Dean of strategies, including high-profile litigations. In these
the Columbia Business School and former Chairman matters, we have worked closely with leading aca-
of the President’s Council of Economic Advisers, and demic experts and supported their analyses. In many
Charlotte Chamberlain, former Chief Economist and cases our work has involved analysis of enormous
Director of Policy and Economic Research at the Fed- data sets of trading records or other financial informa-
eral Home Loan Bank Board, and author of “Tracking tion going back a decade or more.
the Subprime Mortgage Market Meltdown.”
We have assessed appropriateness and risk level of a
2. Securities and Financial Instruments wide range of investments, including MBSs and
CMOs, derivatives, and structured financial instru-
Securities and finance have been a major focus of ments. We have employed portfolio theory to assess
Analysis Group’s work since the firm’s inception in investment strategy, including assessment of compli-
1981. We have worked on some of the most important ance guidelines and restrictions regarding investment
litigations of recent years, including Enron-related accounts. Our work has also involved analysis of the
cases involving major financial institutions; Florida role of corporate governance structure in influencing
State Board of Administration v. Alliance Capital, a investment decisions.
significant victory for the business of active portfolio
management; and Baker v. American Century Invest- Securities Fraud and Stock Price Movements – Over
ment Management, a mutual fund excessive fee action. the past 25 years, we have worked in a consulting
We provided consulting and testifying expertise in capacity in some of the largest 10b-5 cases litigated.
one of the few 10b-5 securities cases to go to trial in Many factors influence stock prices, often in complex,
the last decade: In re Clarent Corporation. Working interrelated ways that emanate from activities both
with leading academics, our teams have been at the within and outside of corporate environments. While
forefront of a number of settlements involving alleged the specific issues vary from case to case, we are often
mutual fund market timing. We also have many years called on to analyze stock price volatility and evaluate
of experience in conducting analysis and valuation of the alleged loss in value attributable to a specific
complex derivative instruments. event or announcement. We often employ an event
study methodology.

Analysis Group Subprime Lending Litigation 4

We have applied economic analyses that rely on More broadly within the real estate sector our work
financial asset pricing models to test for “abnormal” has included economic impact analysis and feasibility
stock price behavior, accounting for changes in the studies of commercial real estate development
industry and general stock market. For settlement projects, evaluation of liability and damage claims
purposes, we have developed a proprietary database involving construction defects, estimation of diminu-
of class action settlements as well as a model for tion in value arising from environmental contamina-
guidance in settlement negotiations. tion, and assessment of demographic issues involving
low income housing projects.
3. Real Estate And Mortgage-Lending
Disputes 4. Class Action Litigation

From our work in the “Winstar” cases arising out of Borrower class actions make up a large percentage of
the savings and loan crisis of the 1980s, through the subprime cases, based on allegations ranging from
current subprime lending fallout, Analysis Group has predatory lending and securities fraud to ERISA
developed broad experience in the areas of real estate violations. We have assisted clients in dozens of class
and mortgage-lending. Our internal experts, working action matters, performing analyses and testifying at
independently and in coordination with our academic deposition and trial. Our work has focused on assess-
affiliates, have used analytical tools from economics, ing the economic underpinnings of commonality and
finance, statistics, accounting, and marketing to typicality arguments to illustrate how causation and
address questions that arise in disputes involving real damages may require individualized assessments,
estate acquisition and financing transactions. We have as opposed to assessments based on common meth-
extensive experience in matters related to loan ods of proof for the entire class. In addition, we have
origination, securitization, and servicing, including: analyzed causation and damages issues in a wide
ƒƒ Analysis of lending policies and underwriting range of matters, including mortgage and real-estate
practices of banks and thrifts; cases. We have provided support to leading academic
ƒƒ Assessment of underwriting costs and fees of experts in developing these analyses.
mortgage lenders;
ƒƒ Investigation of alleged violations of disclosure Our analyses in class action litigations have included:
and anti-kickback provisions of Real Estate ƒƒ Class certification
Settlement Procedures Act (RESPA); ƒƒ Assessing representativeness of the named
ƒƒ Evaluation of variation across regions in real estate plaintiffs
conveyance practices and closing costs; ƒƒ Analyzing commonality of facts and implica-
ƒƒ Assessment of mortgage originators’ loan repur- tions for using common methods of proof
chase obligations; ƒƒ Determining likelihood of zero damages to a
ƒƒ Evaluation of prepayment and default risk in significant number of plaintiffs
mortgage backed securities (MBSs); ƒƒ Causation and damages
ƒƒ Analysis of risks and valuation of collateralized ƒƒ Calculating damages under alternative
mortgage obligations (CMOs). causation scenarios
ƒƒ Assessing whether all members of the class
In the context of litigation, we have assessed both have suffered damages if liability is established
liability and damages issues in lender-liability ƒƒ Calculating the number of potentially
disputes; evaluated allegations of mismanagement, damaged class members
fraud, and anticompetitive activity; and investigated ƒƒ Settlement
claims of breach of fiduciary duty against bank and ƒƒ Assisting in settlement talks and settlement
other lending officers. agreements to ensure targeted and appropriate

Analysis Group Subprime Lending Litigation 5

relief to damaged class members 5. Bankruptcy-Related Litigation

Our assessment of class certification claims encom- Analysis Group has extensive experience in complex
passes a range of approaches. We have employed and high-profile litigations involving bankruptcy
statistical methodologies to examine the relative and solvency issues, including some of the largest
benefits and risks associated with use of the product bankruptcies in U.S. history. Our expertise includes
or service in question, and the relative prevalence of evaluation of the causes of bankruptcy, determination
damages among users and non-users. We have also of liability, and damages and deepening insolvency
conducted analyses that identify conditions consistent measurement related to the actions of various defen-
with alternative causes of the alleged damages. dants as well as quantification of damages to particu-
lar plaintiffs.
In ERISA class actions in which participants in the
company’s stock fund have sought recoverable losses We have conducted research into bank performance
as a result of the fund’s decline in price, our role has and solvency, developed economic models to predict
included an analysis of the degree to which a com- bank failure, valued bank assets, and examined bank
pany’s stock was a prudent investment, a comparison regulations and tax laws affecting financial institu-
of the percentage of plan assets invested in the tions. We have analyzed the values of businesses
company stock fund to the percentage of assets “but-for” the actions of defendants and contrasted
invested in the company stock fund of other 401(k) this with the ultimate value of the firms. We have also
plans, and a careful review of analyst reports and distinguished between damages claims made on
commentaries concerning the risks and returns of the behalf of shareholders and those made on behalf of
company stock. the bankruptcy trustee.

Statistical Sampling for Class Certification – Our Our analyses have involved measurement of all types
use of statistical sampling enables us to make infer- of assets and liabilities, including: purchased mort-
ences about a population. For example, we can gage servicing rights, interest rate swaps, bonds,
evaluate the quality and reliability of data relative to stocks, leases, real estate, collateralized mortgage
source documents; select claims or observations for obligations, and accounts receivable. We have worked
more detailed investigation; and extrapolate analyses on bankruptcy-related cases involving:
from records with adequate information or data to
those with missing or erroneous data. Well accepted Fraudulent Conveyance – Analysis Group has pro-
in litigation and adaptable to the circumstances of vided a variety of analyses in fraudulent conveyance
specific cases, statistical sampling is useful in a matters, often through the work of multiple experts
number of applications, including situations in which: on one case. We have provided expert testimony
ƒƒ The population is too large to analyze each data related to solvency issues, reasonableness of financial
point; projections, industry analyses, fiduciary duty issues,
ƒƒ The cost of analyzing the individual data points is capital structure, and evaluation of damages.
too high;
ƒƒ Elements of the population of interest may be Solvency Analysis – Our staff and experts have pro-
unavailable; vided solvency analysis in connection with questions
ƒƒ Data are missing. of comparable worth, fiduciary duty, and fraudulent
conveyance; in matters involving disputes over rein-
surance receivables; and in cases concerning alleged
negligence in connection with failed LBOs.

Analysis Group Subprime Lending Litigation 6

Deepening Insolvency – We have worked on a ƒƒ Assessment of how accounting misstatements
number of cases involving claims of deepening insol- affect stock prices and/or compensation of senior
vency – an increasingly influential theory of corpo- officers;
rate injury. Plaintiff trustees, receivers, and creditors’ ƒƒ Measurement of actual losses suffered by large
committees have cited the theory to claim damages groups of shareholders or debt holders;
allegedly suffered at the hands of lenders, accoun- ƒƒ Criticism of plaintiffs’ damages models;
tants and others as a result of wrongfully incurred ƒƒ Analysis of damages in an affirmative fashion –
unpayable debt. These damages may take the form i.e., measuring damages properly under various
of added financial distress costs, further diminution liability scenarios.
in the value of the corporation’s assets, or additional
debt used to finance failed investments. We also have extensive experience serving as arbitra-
tors or expert witnesses in arbitration of accounting
6. Accounting Litigation Services disputes.

Analysis Group has provided research, analysis, and 7. Selected Case Experience
expert testimony in many complex disputes involving
accounting and financial issues. We offer extensive Securitized Assets and Derivative Instruments
expertise across many industries, as well as proven
litigation credentials in accounting, economics, and Investor Class Action v. Investment Bank;
finance. Our professional staff, which includes Ph.D.s Solvency Analysis
in accounting, as well as CPAs, CMAs, and CFAs, In this case involving a massive credit card securitiza-
works closely with a network of academic experts tion fraud, our client, a major investment bank, was
who are leaders in these disciplines. granted summary judgment in a class action brought
against it by a financial services company. The
We have examined many complex accounting liability company had charged-off credit card receivables
issues. Our work has included analysis of company purchased from card-issuing banks and financed its
financial statements to determine compliance with purchases using lines of credit and asset-backed
GAAP – for example, we have assessed proper securitizations. The company collapsed into bank-
revenue recognition and cost capitalization. We have ruptcy after its massive fraud was exposed.
analyzed whether certain financial information, such
as data suggesting an imminent bankruptcy, was pub- In a related matter Analysis Group was retained by
licly available, and have assessed the materiality of Simpson Thacher to analyze the solvency of the
adverse events. Our work has also included analysis financial services company. We also undertook an
of firms’ accounting for financial derivatives, in which econometric analysis of its portfolio of securitized
we have measured the effects of the firms’ choices credit card receivables. Analysis Group Managing
on their financial statements. We have also provided Principals Maureen M. Chakraborty and Richard
analyses in various purchase price disputes involving Starfield and Vice President Gaurav Jetley supported
proper calculation of post-closing adjustments. our academic affiliate Professor Stuart Gilson of the
Harvard Business School, who filed an expert report
We conduct damages analyses based on the facts and and provided deposition testimony.
issues surrounding liability. Our expertise lies in our
ability to demonstrate how actions leading to liability Credit Default Swaps Analysis in Enron-Related
also affect the measurement of damages. Our experi- Matter
ence includes: Analysis Group assessed the impact of a credit default
swap on the value of certain Trusts set up jointly by

Analysis Group Subprime Lending Litigation 7

our client and Enron Corporation. Following the involving the collapse of a hedge fund invested in
Enron bankruptcy, investors sued our client, focusing CMOs and MBSs. MKP Master Fund LDC, faced
on the solvency of the Trusts and claiming they were margin calls in excess of $100 million from its prime
deceived as to the credit quality of the underlying broker, SSB. MKP sued, contending that had SSB not
instruments. Our team, led by Managing Principals forced the fund to liquidate its portfolio to meet the
Jonathan Arnold, Maureen Chakraborty, and Marc margin call, the portfolio value would have increased
VanAudenrode, supported our expert, Dr. Michael in value more than $200 million one month later. An
Koehn, who authored an expert report and was Analysis Group team supported our academic experts
deposed regarding the impact of the credit default in demonstrating that deteriorating market conditions
swap on the value of the Trusts. and the portfolio composition precipitated the margin
call. SSB won summary judgment on all nine counts.
Granite Funds, L.P. v. Donaldson, Lufkin and
Jenrette Risk Characteristics of Swaps
The Granite Funds, invested primarily in CMOs and Analysis Group supported our academic affiliate
MBSs, collapsed following a series of interest rate Professor Peter Tufano in his testimony in London
increases. As a result, broker-dealers initiated margin in a case involving structured financial instruments.
calls and subsequently liquidated the Funds’ portfo- Professor Tufano’s testimony focused on the extent
lios. A Litigation Advisory Board (LAB) created in the of variety and innovation in financing, the use of
bankruptcy proceeding to represent the Fund inves- commodity-linked financing, the key elements of
tors sued Donaldson, Lufkin & Jenrette Securities structured finance (in particular, the use of Special
Corporation (DLJ) and several other financial services Purpose Entities, or SPEs), participants in the struc-
firms, alleging that the defendant broker-dealers tured finance market, and illustrations of the use of
made improper margin calls on the Funds and structured finance by firms and governments. Profes-
conducted bad faith and commercially unreasonable sor Tufano also analyzed the risk characteristics of the
liquidations of the Funds’ securities. derivatives sold by our client, a leading investment
bank. In a 228-page opinion, the judge endorsed the
Working with Friedman Kaplan Seiler & Adelman, analysis of Professor Tufano and ruled on behalf of
and Berlack, Israels & Liberman, counsel for the LAB, our client.
Analysis Group developed analytical models to
compute the fair market values of the Funds’ portfo- Analysis of Industry Performance and Derivative
lios of collateralized mortgage obligations and Valuation
mortgage-backed securities on the margin call and Analysis Group was retained by an investor to value
liquidation dates. The Funds settled their claims derivative instruments whose values were tied to the
against DLJ for more than $30 million. This settlement performance of underlying portfolios of asset-backed
followed the Court’s ruling that denied the defen- securities, including collateralized debt obligations
dants’ motions for summary judgment. When and mortgage-backed securities, across a variety of
combined with a previous settlement with Bear, industries. The valuation work we performed
Stearns & Co. in November 1999, the Funds recovered included researching industry-level performance and
more than $70 million. the effect this performance had on the portfolio of
underlying securities, and the effect of this perfor-
MKP Master Fund LDC v. Salomon Smith Barney mance on the value of the derivative instruments.
Analysis Group was retained by the law firm of
Cravath, Swaine & Moore on behalf of defendant
Salomon Smith Barney (SSB) in a securities litigation

Analysis Group Subprime Lending Litigation 8

Securities Fraud by the plaintiff’s expert. Judge Jed S. Rakoff of the
Southern District of New York concluded that the
Clarent Corporation 10b-5 Case expert’s methodology was “so transparently unreli-
Analysis Group helped Ernst & Young achieve a able as to be inadmissible under law.” In denying
victory in a securities fraud class action trial, one of class certification, Judge Rakoff stated that “plaintiffs
only a few such trials to go to a verdict in the last cannot satisfy such prerequisites to class action
decade. The case involved alleged accounting irregu- status....This Court now holds that the ‘fraud-on-the-
larities at Clarent Corporation, a California-based market’ doctrine applies in a case premised on a
Voice over Internet Protocol (VoIP) company, for securities analyst’s false and fraudulent opinions or
which Ernst & Young had done auditing work. recommendations only where the plaintiff can make a
Plaintiffs claimed that Ernst & Young was liable for prima facie showing that the analyst’s statements
securities fraud and asked for approximately $125 materially impacted the market price in a reasonably
million in damages. quantifiable respect.”

Retained by counsel for the defendant, Analysis AT&T 10b-5 Class Action
Group critiqued the plaintiffs’ damages methodology Analysis Group was retained by Sidley Austin Brown
and estimates. Analysis Group Managing Principal & Wood, counsel for AT&T, in a 10b-5 securities class
Bruce Deal coordinated our consulting assistance on action suit. Shareholders of the company alleged that
damages and causation issues, while Managing AT&T and its former chief executive had provided
Principal Robert Sherwin served as the testifying misleading guidance on financial results for the 2000
expert on damages. In his testimony, Mr. Sherwin fiscal year in order to maintain the stock price in
used a demonstrative exhibit that helped illustrate to advance of an initial public offering for AT&T’s
the jury how much of Clarent’s stock price decline wireless unit. Analysis Group academic affiliate
could be attributed to market forces affecting similar Professor George Foster provided economic analysis
companies, independent of fraud. The stock price and deposition testimony regarding the reasonable-
decline was a key aspect of the plaintiffs’ damages ness of AT&T’s financial guidance. Professor Foster
claims. After three weeks of testimony, the jury analyzed company-specific data from AT&T’s budget-
returned with a finding of no liability and no dam- ary and forecasting systems to determine if these
ages against Ernst & Young. systems were designed properly to provide reason-
able estimates. His analysis also included the impact
DeMarco v. Lehman Brothers of external factors on AT&T’s forecasting, such as the
A U.S. District Court judge denied class certification overall health of the marketplace as of late 1999, when
in a 10b-5 securities matter involving “fraud-on- the projections were made, which was prior to the
the-market” allegations. Plaintiffs accused Lehman market downturn that began later in 2000; review of
Brothers and one of its analysts of making “buy” industry analyst reports; and past budgets and
recommendations for RealNetworks’ stock because of budgetary mechanisms of AT&T. The plaintiffs had
Lehman’s investment banking relationship with the sought $2.4 billion in damages, but the case was
firm. Analysis Group was retained by Paul, Weiss, Rif- settled for $100 million after three weeks of trial.
kind, Wharton & Garrison LLP on behalf of Lehman
Brothers. The plaintiffs’ expert filed a report alleging General American Liquidation Litigation
that the stock would have declined 10 percent if the Analysis Group was retained by the Missouri Depart-
analyst had recommended “sell” rather than “buy.” ment of Insurance to analyze damages and causation
issues related to the unexpected failure of General
The Analysis Group team worked closely with the American, a large Missouri life insurance company.
Paul Weiss attorneys to rebut the analysis undertaken At issue was the company’s exposure to, and public

Analysis Group Subprime Lending Litigation 9

disclosures about, corporate bond valuations, inter- EMC Mortgage Corp. v. Ameriquest Mortgage Co.
est rates, and rating agency standards. A series of Analysis Group was retained by counsel for Ameri-
unusual events led to a liquidity crisis as the company quest in a dispute involving Ameriquest’s obligation
had to liquidate sometimes illiquid bonds that had to repurchase certain subprime mortgages from EMC
rapidly decreased in value. The Missouri Department under a series of loan purchase and servicing agree-
of Insurance had to intervene, with a resulting quick ments. Our affiliate, Charlotte Chamberlain, issued
sale of the company. The litigation with the auditors an expert report documenting the development and
over financial statement disclosures was settled after subsequent collapse of the subprime mortgage and
depositions. mortgage-backed securities markets. Her analysis
highlighted how residential real estate prices and
Real Estate and Mortgage-Related Litigation developments in the securities markets interacted to
force the closure of many subprime lenders.
10b-5 Litigation Involving Subprime Lending by a
Major Bank FDIC v. Bright (First Republic Bank of Dallas)
Analysis Group was retained in this matter involving Analysis Group was retained by attorneys for direc-
allegations of violations of Section 10b-5 of the tors and officers of First Republic Bank of Dallas to
Securities and Exchange Act. Issues included: (1) help them respond to claims of mismanagement and
whether certain subprime lending practices should imprudent lending. We reviewed all aspects of the
have been more explicitly disclosed to shareholders; bank’s relationship with its largest borrower, includ-
(2) whether certain subprime business practices were ing financial strength of the borrower, collateral for
abusive; (3) whether restatements of financial state- loans, review and approval of loan applications,
ments due to new auditors showed management to be appraisal policies and procedures, and restructuring
negligent when the old auditors insisted no restate- of loans.
ments should be made; (4) whether the bank had
suitable levels of loan-loss reserves; (5) whether the Mortgage Insurance Industry RESPA Cases
loan-loss reserve model for the bank should have In a series of class action suits involving allegations of
been more explicitly disclosed to shareholders; and (6) RESPA violations, Analysis Group was retained on
whether negotiations by the bank with an attorneys- behalf of the Joint Defense Committee of the mort-
general group should have been disclosed earlier to gage insurance industry. The Joint Defense Commit-
shareholders. tee included MGIC, PMI Mortgage Insurance Com-
pany, RMIC, and United Guaranty Corporation,
Review and Analysis of “A Study of Closing Costs representing approximately 80% of the industry. The
for FHA Mortgages” plaintiffs claimed that – in exchange for referrals – the
In a current assignment, Analysis Group has been insurers offered services to lenders at prices below
retained to evaluate a May 2008 study sponsored by cost, thus violating anti-kickback provisions of
HUD that examines loan fees and closing costs paid RESPA. The products at issue included GSE pool
by FHA borrowers. The HUD report concludes that insurance, contract underwriting, captive reinsurance,
African-American and Latino borrowers and those and financing arrangements.
living in areas in which educational attainment is
lowest pay more to lenders, title insurers, and closing Our work involved estimating potential industry
agents than do other borrowers. The analysis uses a exposure and assisting with settlement negotiations;
range of econometric techniques and data sources to determining whether the products at issue were
study a national sample of 7,500 transactions involv- adequately priced; and identifying differences among
ing FHA-insured loans. the arrangements that necessitated examination on a
lender-by-lender and transaction-by-transaction basis.

Analysis Group Subprime Lending Litigation 10

MGIC, PMI, and United Guaranty Corporation settled examined whether discrimination had occurred and
with the plaintiffs after the Court’s summary judg- estimated the effects of the denial of housing on
ment ruling. RMIC proceeded with litigation and protected classes.
defeated class certification.
Commonwealth Court Building, Inc. v. Criimi Mae
Analysis Group also helped GEMICo address similar Services
allegations. We analyzed GEMICo’s marginal cost of Working on behalf of Criimi Mae, a commercial
contract underwriting and assisted in the re-pricing of mortgage company structured as a REIT, in this
its products. matter involving an alleged wrongful failure of a
mortgagee to consent to certain conditions surround-
Ben S. Branch, Trustee of Bank of New England ing a proposed new lease, Analysis Group examined
Corporation v. Federal Deposit Insurance Corpora- the commercial space market in Los Angeles and its
tion as Receiver of New Bank of New England, expected performance over the next decade. In
N.A., et al. particular, the Analysis Group team valued the
Analysis Group managed the financial and economic prospects that the owners of the building would enter
analysis in a fraudulent conveyance litigation involv- into alternative arrangements, used an option pricing
ing one of the largest bank failures in U.S. history. We methodology to value the ability to extend the lease,
identified and supported numerous academic wit- and critiqued the plaintiff’s valuation/damages
nesses to present testimony on the economics of the model. The court dismissed the claims of the plaintiff.
real estate markets of the 1980s, real estate lending
practices, the banking industry, and factors that led to Robins v. Roland
bank failures in the 1980s and 1990s. In particular, we Analysis Group Managing Principal Robert Sherwin
undertook a thorough examination of the Bank of provided trial and deposition testimony regarding the
New England’s real estate lending practices and valuation of a land development company and the
analyzed the public expectations for real estate prices net payments owed to the departing owners. Working
and the change in those expectations over time in the with Greenberg Traurig, LLP on behalf of the remain-
face of what was later identified as a massive decline ing owner, Mr. Sherwin’s valuation included forecast-
in real estate values. We worked closely with several ing the default rate of the company’s high-interest
testifying experts from Harvard Business School, mortgages and the value of land returned to inven-
Wellesley College, Wharton, and UC Berkeley. tory. The court generally ruled in favor of our client.

Coachella Valley Housing Coalition v. City of Additional Relevant Case Experience

Moreno Valley
Analysis Group supported our academic affiliate, Subprime Automobile Loan Portfolio Analysis
Professor Dennis Aigner, who submitted an expert Analysis Group evaluated plaintiffs’ damages claim
report on behalf of the plaintiff in this case in which relating to the underwriting and loan servicing of
the plaintiff alleged that it was unfairly denied subprime automobile loans. The plaintiffs alleged that
building permits for a low-income housing develop- the servicing company did not properly administer
ment. The Analysis Group team used census data and the portfolio of subprime automobile loans, thereby
information from public housing waiting lists to causing excessive loan losses. Our analysis demon-
perform a variety of statistical analyses of the low- strated that the plaintiffs’ financial experts failed to
income housing market, including a study of whether take into account alternative reasons for loan perfor-
minority households are more likely to be low-income mance. Analysis of the plaintiffs’ loan volume, interest
than non-minority households. These analyses income, loan loss rate, and deteriorating industry

Analysis Group Subprime Lending Litigation 11

conditions also demonstrated that the plaintiffs’ economist for the Board of Governors to the Federal
business plan did not provide a reasonable basis from Reserve System in Washington, D.C., where he helped
which to calculate claimed damages. develop several significant regulatory initiatives
including risk-based capital, which monitors the
“Winstar” Damages Litigations equity value of commercial banks to protect the
Analysis Group assisted the Federal Deposit Insur- deposit insurance system. He is currently on the
ance Corporation (FDIC) in analyzing economic Boards of Directors of Alliance Data Systems and
issues related to the “Winstar” damages litigation. Rimage Corporation.
These cases involved allegations by more than 100
failed savings and loan institutions that the federal Karl E. Case; Katherine Coman and A. Barton Hepburn
government breached its contracts with them by Professor of Economics, Wellesley College
passing the Financial Institutions Reform, Recovery, Professor Case’s research has focused on real estate,
and Enforcement Act of 1989. Through passage of this housing, and public finance. He is author or co-author
act, the plaintiffs claimed, the government revoked of five books including Principles of Economics, Eco-
the right to include an intangible asset called “super- nomics and Tax Policy and Property Taxation: The Need
visory goodwill” when calculating capital for regula- for Reform, and has published numerous articles in
tory requirements. In most cases, this goodwill was professional journals. He has also authored several
booked by the plaintiffs in connection with super- studies that attempt to isolate the causes and conse-
vised transactions involving troubled thrift institu- quences of boom and bust cycles and their relationship
tions. Our role in these cases involved analysis of to regional economic performance. Professor Case is a
economic, finance, accounting, and damages/ Visiting Scholar at the Federal Reserve Bank of Boston
valuation issues. and a founding partner of the real estate research firm
Fiserv Case Shiller Weiss, Inc. He also serves on the
8. Selected Academic and Industry Boards of Directors of the Mortgage Guaranty Insur-
Experts ance Corporation (MGIC), Century Bank, and Lincoln
Institute of Land Policy. He was elected to the Board
Brief biographies of selected Analysis Group of Directors of the American Real Estate and Urban
academic and industry affiliates are presented below. Economics Association in 2003 and is associate editor
Full CVs are available upon request. of the Journal of Economic Perspectives.

Real Estate and Mortgage-Lending Charlotte Chamberlain, Ph.D.; Chamberlain

Lawrence M. Benveniste; Dean and Asa Griggs Dr. Chamberlain specializes in analysis of complex
Candler Professor of Finance, Goizueta Business School, litigation issues involving securities, banks, and
Emory University thrifts. Until October 2005, Dr. Chamberlain was a
Professor Benveniste’s areas of specialization include managing director in equity research at Jefferies &
initial public offerings of equity, credit scoring and Company, Inc. covering financial services—primarily
valuation of subprime loans, portfolios, and securiti- banks, thrifts, market makers, and traders. Prior to
zation. Before coming to Emory, he was Dean of the joining Jefferies, she was a vice president at Wedbush
Carlson School of Management at the University of Morgan, a Los Angeles-based securities firm special-
Minnesota, where he also served as U.S. Bancorp izing in West Coast companies. Dr. Chamberlain
Professor of Finance. He is a former member of the previously served as vice chair of NewAmerica
faculties of Boston College, Northwestern University, Savings, where she directed all financial, operations,
the University of Pennsylvania, and the University of and regulatory aspects of the bank. Prior to her board
Rochester. Professor Benveniste worked as a staff participation at NewAmerica, she was executive vice

Analysis Group Subprime Lending Litigation 12

president and director of strategic planning at tion II, the American Association of Individual
Glendale Federal Bank, now part of Citigroup. There Investors and The MBA Investment Fund, L.L.C.
she chaired the Asset/Liability Committee and was a
member of the Operating and Investment Commit- Myron Glucksman, Esq.; President, Myron
tees. While at Glendale, Dr. Chamberlain was Glucksman Consulting
appointed to the Thrift Institutions Advisory Council Myron Glucksman, retired managing director in
of the Federal Reserve Board of Governors and the Citigroup’s Corporate and Investment Bank, has over
Real Estate Advisory Board for the University of thirty-three years of investment banking and legal
California at Berkeley. Before joining Glendale, Dr. experience in a broad range of securities, corporate
Chamberlain was Chief Economist and Director of and consumer matters. He currently provides inde-
Policy and Economic Research at the Federal Home pendent expert advice to law firms, investment banks,
Loan Bank Board. That office was responsible for and companies on structured finance matters includ-
providing financial analysis to the Board on fixed ing asset- and mortgage- backed securities. His MBS
income and mortgage markets and the thrift industry, and ABS experiences includes developing Citi’s first
as well as forecasts of the costs of thrift failures to the collateralized mortgage obligation (CMO) and several
Federal Savings and Loan Insurance Corporation. of its various credit card ABS structures. He recently
While at the Bank Board, Dr. Chamberlain authored was a testifying expert on retail credit card and
Agenda for Reform, which examined the changes securitization matters and has been an expert witness
needed in the nation’s deposit insurance and regula- on various due diligence matters for JP Morgan
tory systems to guarantee their viability in a deregu- Chase, Merrill Lynch, and US Bancorp. He has
lated and highly competitive world. In addition, she transactional experience in many types of consumer
has authored numerous articles on mortgage finance, and commercial asset classes as well as having
housing, and measuring the equity value of thrifts. operational and managerial start up experience for
several retail credit businesses. He has interfaced with
George Gau; Dean, Red McCombs School of Business; governmental agencies, regulators and rating agen-
J. Ludwig Mosle Centennial Memorial Professor in Invest- cies. Mr. Glucksman has presented to the U. S. Senate
ments and Money Management; George S. Watson Centen- Subcommittee on Securities on securitization matters
nial Professor in Real Estate; Centennial Chair in Business in 1992, and was a lecturer on Current Policy Issues in
Education Leadership, University of Texas, Austin Securitization at the American Securitization Forum’s
Professor Gau is a recognized authority in the field of annual conference in 2005. Mr. Glucksman is a
real estate finance, having authored more than 40 member of the Bars of New York, New Jersey, and the
publications in leading real estate and finance jour- District of Columbia and admitted to practice before
nals. He has served as an expert witness in major real the Supreme Court of the United States.
estate and financial litigation as well as a real estate
consultant to a number of government agencies and Julia Leah Greenfield, Esq.; Independent
private corporations. Professor Gau is a past president Consultant, Mortgage Banking Law
of the American Real Estate and Urban Economics Ms. Greenfield has been in-house counsel with several
Association and a past fellow of the Urban Land of the largest nationwide wholesale and retail sub-
Institute. Prior to becoming dean, Professor Gau prime and Alt A mortgage lenders since 1996. Prior to
served for ten years as Chairman of the Finance 1996, she was in-house counsel with several large
Department in the McCombs School. He is currently federal savings banks. Her mortgage banking practice
Chairman of the Board of Trustees of the Brazos has been focused on federal and state regulatory
Mutual Funds. He is also a member of the Board of compliance from origination to servicing, including
Directors of the Guaranty Preferred Capital Corpora- compliance with federal and state predatory lending,

Analysis Group Subprime Lending Litigation 13

privacy, fair lending, licensing, advertising and served as an expert in numerous real estate-related
consumer protection laws such as the federal Truth- matters in which he has, for example, testified on
in-Lending Act, Home Ownership Equity Protection appraisal and the value of distressed mortgages. He
Act, RESPA, Equal Credit Opportunity Act, Fair currently serves on the board of directors of several
Credit Reporting Act, Home Mortgage Disclosure Act, organizations, including ArCap REIT, Inc., EquiBase
the Fair Housing Act and the Fair Debt Collection Capital Partners, and the American Real Estate and
Practices Act, as well as their implementing Regula- Urban Economics Association. He is also a managing
tions and Commentaries. She has developed an editor of Real Estate Finance. Professor Riddiough is
expertise in all aspects of subprime and Alt A opera- the past recipient of the best dissertation and best
tions, including loan sales and repurchase demands paper awards in Real Estate Economics, and is a
and nontraditional mortgage loan products. Ms. fellow at the Homer Hoyt Institute for Advanced
Greenfield has co-authored two treatises on the Studies as well as the Real Estate Research Institute.
federal Truth-in-Lending Act and has lectured on He has served as a consultant for numerous organiza-
mortgage banking and predatory lending issues. tions, including HUD, GMAC, Wells Fargo, CB
Commercial, Equitable Life Assurance, and the State
John J. McConnell; Professor of Finance, Emanuel T. of Wisconsin Investment Board. He teaches courses in
Weiler Distinguished Professor of Management, Krannert Real Estate Finance, Real Estate Capital Markets, and
School of Management, Purdue University Microeconomics. Professor Riddiough has published
Professor McConnell has served as a member of the over 40 scholarly articles.
Boards of Directors of the Federal Home Loan Bank of
Indianapolis, the American Finance Association, and Steven L. Schwarcz; Stanley A. Star Professor of Law
Harrington Bank FSB. He currently serves as a & Business, Duke University
member of the Board of Directors of Los Padres Bank Professor Schwarcz’s main areas of scholarship are
FSB. He has consulted to investment banks, govern- commercial law, bankruptcy, and international finance
ment agencies (including the Federal Home Loan and capital markets, where he brings the unique
Mortgage Corporation, the Department of Housing perspective of having been a leading practitioner as
and Urban Development, and Department of Justice), well as a scholar. Prior to joining the Duke faculty in
and over 50 law firms on such matters as stock and 1996, he was a partner at the law firm of Shearman &
bond prices, corporate valuation, cost of capital, Sterling and then a partner and practice group
mergers and acquisitions, derivatives, mortgage chairman at Kaye Scholer LLP, where he represented
backed securities, CMOs, money management many of the world’s leading banks and other financial
practices, and bank and thrift lending and investment institutions in structuring innovative capital market
practices. He has published over 75 articles that have financing transactions, both domestic and interna-
appeared in leading finance, economics and manage- tional. He also helped to pioneer the field of asset
ment journals. He is currently associate editor of the securitization, and his book, Structured Finance, a
Journal of Corporate Finance, the Journal of Financial and Guide to the Principles of Asset Securitization (3d edition
Quantitative Analysis, the Journal of Fixed Income, and 2002), is one of the most widely used texts in the field.
the Pacific-Basin Finance Journal. While practicing law, Professor Schwarcz taught at
the Yale, Columbia, and Cardozo (Yeshiva University)
Timothy J. Riddiough; Director, Center for Real law schools. He also founded and was the first
Estate; Professor and E.J. Plesko Chair of Real Estate and Faculty Director of Duke’s interdisciplinary Global
Urban Land Economics, University of Wisconsin-Madison Capital Markets Center. He has also has been an
Professor Riddiough is best known for his work on adviser to the United Nations on international
real options, mortgage pricing and strategy, real estate receivables financing, a member of the U.S. Secretary
investment trusts, and land use regulation. He has of State’s Advisory Committee on Private Interna-

Analysis Group Subprime Lending Litigation 14

tional Law, Visiting Professor at the University of with financial institutions in Japan, Hong Kong, and
Geneva Faculty of Law, and Senior Fellow at The Singapore. Mr. Weiner has testified extensively in
University of Melbourne Law School. Among other fixed-income, structured finance, and derivatives-
honors, Schwarcz is a Fellow of the American College related lawsuits and arbitrations. His testimony and
of Commercial Finance Lawyers and Founding consulting work have centered on such issues as
Member of the International Insolvency Institute. He suitability, risk assessment, complex security structure
has been appointed advisor to the American Bar Asso- and valuation, portfolio strategies, and broker-dealer
ciation Business Law Section, 2008-2009. sales and trading practices.

Kerry Dean Vandell; Executive Director, Center for Susan E. Woodward; Founder and Chairman, Sand
Real Estate, University of California, Irvine Hill Econometrics, Inc.
Professor Vandell is currently involved in research on Dr. Woodward, an expert in financial economics, has
the nature of architecture and urban design as eco- held prestigious appointments in both academia and
nomic amenities, the potential impact of restructuring government. She has been on the faculties of the
the mortgage interest and property tax deduction on University of California at Los Angeles and at Santa
homeownership, an economic perspective on envi- Barbara and the University of Rochester’s Simon
ronmental justice issues, and the valuation of complex School. She has also served as Chief Economist of the
real property interests. He has consulted both in the Securities and Exchange Commission, Chief Econo-
public and private sector and has wide experience as mist of the Department of Housing and Urban
an expert witness on topics ranging from the valua- Development, and Senior Staff Economist for Finan-
tion of complex property interests, mortgage finance, cial Markets and Institutions at the Council of
and real estate investment to commercial and resi- Economic Advisers. While at HUD she was respon-
dential real estate market dynamics. He is a member sible for policy analysis on all housing finance issues.
of many editorial boards of peer-reviewed jour- She consults and testifies in the areas of mortgage-
nals including the Journal of Housing Research, Land lending practices, financial services, mortgage
Economics, and the Journal of Real Estate Finance and insurance, and securities trading and litigation. Her
Economics. He also serves on the Editorial Advisory consulting clients have included HUD, Freddie Mac,
Board of the Fannie Mae Foundation in Washington, Wells Fargo Bank, Mortgage Insurance Companies of
D.C. Professor Vandell, a former President of the America, and GMAC. She is currently completing
American Real Estate and Urban Economics Associa- major assignments for the FHA on real estate closing
tion, has also served as co-editor of the association’s costs and for a private national lender in developing
journal, Real Estate Economics. new mortgage instruments.

Lawrence P. Weiner; President, Weiner Consulting Bankruptcy

Mr. Weiner has more than eighteen years of experi-
ence in the fixed-income securities markets as a John D. Finnerty; Professor of Finance, Graduate
portfolio strategist, product specialist, and consultant. School of Business Administration, Fordham University
He is formerly a vice president and fixed-income Professor Finnerty specializes in business valuation,
securities strategist for Lehman Brothers, where he securities valuation, solvency analysis, calculation of
assisted banks, pension funds, insurance companies, damages, and litigation support for matters involv-
and money managers in security selection and ing valuation disputes, securities fraud, solvency,
fixed-income portfolio management. Mr. Weiner has fairness, breach of contract, breach of fiduciary duty,
also held positions in the mortgage-backed securities commercial disputes, and employment disputes con-
department of Morgan Stanley & Co., Inc., including cerning the valuation of employee stock options. He
two years in the firm’s Tokyo office, where he worked has testified as an expert in valuation, securities, and

Analysis Group Subprime Lending Litigation 15

other financial matters in federal and state court and Securities
in arbitration and mediation proceedings. He has also
testified as an expert in bankruptcy court concerning Raymond Ball; Sidney Davidson Professor of
the fairness of proposed plans of reorganization. A Accounting, Booth School of Business, the University of
nationally recognized expert in securities and busi- Chicago
ness valuation, Professor Finnerty has published nine Professor Ball has provided expert testimony in mul-
books including Corporate Financial Management, Prin- tiple cases involving benchmarking product prices
ciples of Financial Management, and Debt Management and profitability in the software industry. He is one of
and more than 70 articles and professional papers. the world’s leading experts on the relation between
financial disclosures and stock prices. His research
Stuart C. Gilson; Professor of Finance, Harvard with Philip Brown on earnings and stock prices
Business School received the American Accounting Association’s
Professor Gilson’s current research focuses on tech- inaugural award for Seminal Contributions to the
niques for valuing bankrupt and distressed com- Accounting Literature. Professor Ball is the author of
panies and on strategies for investing in distressed over 80 papers and has held numerous editorial lead-
company securities. He has also investigated deter- ership positions. He is co-editor of Journal of Account-
minants of financial leverage and capital structure in ing Research; former editor of Journal of Accounting
highly leveraged or distressed companies and how and Economics; and was founding editor of Australian
those firms hire, fire, and compensate their senior Journal of Management. He is associate editor of Journal
managers and directors. For the last five years he of Contemporary Accounting and Economics; member of
has been named one of the nation’s top bankruptcy the editorial board of European Accounting Review; for-
academics by Turnarounds & Workouts magazine and mer associate editor of Journal of Banking and Finance;
is listed in Who’s Who in Economics. Professor Gilson and a former editorial board member of Journal of
has written extensively on such topics as corporate Business Finance and Accounting. He is a trustee of
bankruptcy and debt workouts, tracking stock, equity Harbor Funds.
spin-offs, corporate downsizing, bank mergers, and
employee buyouts. His research has been published Steven Grenadier; William F. Sharpe Professor of
in The Journal of Finance, The Review of Financial Studies, Financial Economics, Graduate School of Business,
The Journal of Financial Economics, Financial Analysts Stanford University
Journal, and Harvard Business Review, among oth- Professor Grenadier specializes in investment analy-
ers. He has been cited in The Wall Street Journal, The sis, including finance theory and portfolio manage-
New York Times, Business Week, The Economist, and ment. His research interests include the applications
U.S. News and World Report. He won the prestigious of option-pricing theory; real estate development,
Graham and Dodd Award for his article “Investing finance, and economics; the interaction of game
in Distressed Situations: A Market Survey.” Recently, theory and option pricing. He has published numer-
Professor Gilson’s collection of case studies on cor- ous articles in finance and economics journals and
porate restructuring, Creating Value Through Corporate spoken at dozens of academic and business confer-
Restructuring: Case Studies in Bankruptcies, Buyouts, and ences. He also has received several awards including
Breakups, was published by John Wiley & Sons. the prestigious Smith Breeden Prize awarded annu-
ally for the best paper by the Journal of Finance.
Professor Grenadier currently serves as a Director of
E*Trade Funds and as a Senior Economist to Financial
Engines, Inc., an online investment adviser.

Analysis Group Subprime Lending Litigation 16

R. Glenn Hubbard; Dean; Russell L. Carson Group of the National Bureau of Economic Research.
Professor of Economics and Finance; Co-Director of Professor Stulz has published more than sixty papers
Entrepreneurship Program, Graduate School of Business, in finance and economics journals, including the
Columbia University Journal of Political Economy, the Journal of Financial
Professor Hubbard is a leading expert in public Economics, and the Journal of Finance. His published
economics, corporate and institutional finance, research deals with topics such as the benefits and
macroeconomics, and industrial organization. From costs of leverage, spin-offs and asset sales, the
2001 to 2003, he served as Chairman of the President’s determinants of liquid asset holdings of firms,
Council of Economic Advisers. A frequent speaker, secured debt, bank loans, the pricing of exotic options,
Professor Hubbard has presented his research at credit risks, the cost of capital, the market for corpo-
economic conferences throughout the world. He has rate control, corporate governance, the performance
served as a consultant to several government and of firms issuing debt and equity, the determinants of
international agencies including the U.S. Department firm capital structures and liquid asset holdings, the
of Treasury, U.S. International Trade Commission, The use of derivatives in risk management, capital flows,
World Bank, Board of Governors of the Federal and financial globalization. He is the author of a
Reserve System, Federal Reserve Bank of New York, textbook titled Risk Management and Derivatives and
and the Congressional Budget Office. Professor has edited several books, including the Handbook of the
Hubbard has written over 90 scholarly articles and Economics of Finance.
has edited volumes on international tax policy and
financial markets. He is the author of the widely used Accounting
textbook, Money, the Financial System, and the Economy.
Professor Hubbard was the 1998 recipient of the John M. Lacey; Ernst & Young Research Fellow,
Western Finance Association’s Best Paper Award for Professor of Accountancy, School of Business, California
Corporate Finance. State University, Long Beach
Professor Lacey’s research and professional interests
René M. Stulz; Everett D. Reese Chair of Banking and focus on the implications of financial accounting
Monetary Economics and the Director of the Dice Center standards for business outcomes. As Chairman of the
for Research in Financial Economics, Fischer College of Real Estate Committee of the American Institute of
Business, Ohio State University Certified Public Accountants (AICPA), Professor
Professor Stulz is an expert on the measurement of the Lacey was responsible for the proposal, drafting, and
cost of capital, corporate valuation, valuation of presentation of accounting standards on real estate
securities in illiquid markets, stock and bond prices, issues. As a member of the Accounting Standards
derivatives valuation and uses, mergers and acquisi- Executive Committee of the AICPA, he voted to clear
tions, risk management, banking, and capital struc- the S&L Accounting and Auditing Guide, which
ture. He is a past president of the American Finance established the generally accepted accounting
Association and of the Western Finance Association, principles that must be followed by all savings and
and a fellow of the American Finance Association, of loan institutions. While on the Executive Committee
the Financial Management Association, and of the he also voted on accounting for real estate syndication
European Corporate Governance Institute. He was income and on criteria for determining whether
the editor of the Journal of Finance for twelve years. He collateral for a loan has been in-substance foreclosed.
is on the editorial board of more than ten academic He has provided expert witness testimony on the
and practitioner journals. Further, he is a member of financial accounting treatment of real estate transac-
the Asset Pricing and Corporate Finance Programs tions and the recognition of profits on real estate sales,
and the director of the Risk of Financial Institutions including testimony in cases involving major real

Analysis Group Subprime Lending Litigation 17

estate companies, financial institutions, and failed professionals that met to debate and resolve financial
S&Ls. His testimony experience includes serving on reporting issues.
behalf of a CPA firm as an expert on a case involving
the audits of a group of limited partnership real estate Stephen G. Ryan; Professor of Accounting and Peat
companies involving allegations of fraud and over- Marwick Faculty Fellow, Stern School of Business, New
valued assets. York University
Professor Ryan has taught courses in the areas of
George Foster; Paul L. and Phyllis Wattis Professor of accounting, valuation, and financial statement analysis
Management; Director of the Executive Program for and on accounting and valuation issues in the enter-
Growing Companies, Graduate School of Business, tainment, media, and technology industries. His pri-
Stanford University mary research areas include accounting measurement,
Professor Foster’s teaching and research interests are accounting-based valuation, and financial reporting
new venture globalization strategies, sports business by financial institutions. Professor Ryan has published
management, strategic cost analysis, and business in numerous journals including The Accounting Review,
modeling in litigation analysis. He is active in venture Journal of Accounting, Auditing and Finance, Journal
capital and the Silicon Valley business community. He of Accounting Research, Review of Accounting Studies,
serves on the board of several start-ups and is an Accounting Horizons and Financial Analysts Journal. He
adviser to entrepreneurs. He is author or co-author of is also the author of Financial Instruments and Institu-
seven books or monographs including Financial tions: Accounting and Disclosure Rules (John Wiley &
Statement Analysis and Cost Accounting: A Management Sons, 2002). Professor Ryan currently serves on the
Emphasis. Professor Foster is also author or co-author Financial Accounting Standards Advisory Council. He
of over 30 articles and has received multiple research has testified in several cases including a recent case
awards from academic and business associations. in which his expertise was used in the valuation of a
Companies he has worked with include Apple large group of movie theaters.
Computer, ARCO, Australian Stock Exchange,
Borland, DEC, Exxon Corporation, Frito-Lay, Hewlett 9. Selected Professional Staff
Packard, McDonald’s Corporation, and PepsiCo.
Brief biographies of selected Analysis Group
Timothy S. Lucas; President, Lucas Financial Reporting professional staff are presented below. Full CVs
Mr. Lucas, former Director of Research and Technical are available upon request.
Activities at FASB, specializes on issues related to
GAAP. His engagements have included consulting Jonathan Arnold, Managing Principal; Ph.D.
with corporate management on problems identified in Business Economics and M.B.A. in Finance and
with past accounting that might require restatement, Accounting, Graduate School of Business, the University
as well as appropriate accounting for prospective of Chicago; CPA
transactions. He has also worked with legal counsel Dr. Arnold has provided expert testimony as well as
as an expert in both testifying and consulting roles in case management and consulting expertise in numer-
various civil and criminal legal proceedings and SEC ous matters involving securities, working with the
investigations. Mr. Lucas, supported by Analysis nation’s top law firms on behalf of numerous Fortune
Group, served as an accounting expert in Venture 500 companies. He is currently assisting a client issuer
Capital Firm v. Home Furnishings Company where he of subprime credit in connection with a federal
conducted research regarding whether various investigation of its promotion and lending practices.
accounting treatments were consistent with U.S. He regularly manages complex civil litigation matters
GAAP. He is also a former Chairman of the Emerging in which he has assessed arguments submitted by
Issues Task Force at FASB, a group of top accounting multiple expert witnesses and prepared multiple

Analysis Group Subprime Lending Litigation 18

experts in rebuttal covering aspects of accounting, Finance practice and Chernivtsi State University in
economics, and finance. In addition, he testifies on Ukraine. He is currently assisting counsel in a number
liability and damages issues in securities, antitrust, of matters involving stock options and backdating,
intellectual property, and complex business tort including investigations by the Department of Justice
disputes. He is currently advising a top financial and the Securities and Exchange Commission, as well
institution in connection with its Enron-related as related lawsuits.
litigations and recently assisted Honeywell in a $1
billion case involving alleged accounting fraud and Maureen M. Chakraborty, Managing Principal;
fraudulent conveyance. His experience also includes Ph.D. in Economics, University of Notre Dame; B.A. in
leading the expert work and attendant analysis in Economics, Colby College
Winstar cases for the U.S. Department of Justice, Dr. Chakraborty has extensive experience applying
serving as an expert witness for the Chicago Board of economics and finance to problems arising in com-
Trade in a matter involving electronic trading patents, plex business litigation and bankruptcy. Her areas of
and advising a large asset management/investment expertise include analyzing stock price movements,
fund firm regarding an SEC investigation into trading assessing market competition, valuing closely held
practices. Mr. Arnold was formerly a principal at companies, and developing and evaluating complex
Chicago Partners and has served as a Lecturer at the damage models. Dr. Chakraborty has provided con-
University of Chicago Booth School of Business and sulting and expert witness services in matters involv-
the Department of Economics. He is a member of the ing antitrust, breach of contract, business interrup-
American Economic Association and the American tion, employment disputes, fraudulent conveyance,
Law and Economics Association. intellectual property, securities, and successor liability
issues. She has also provided consulting assistance
T. Christopher Borek, Managing Principal; relating to transfer pricing disputes. Examples of Dr.
Ph.D. in Economics, Cornell University, European Union Chakraborty’s litigation and consulting engagements
Diploma, Institut D’Etudes Politiques de Paris, M.A. in include providing economic analyses of issues involv-
Economics, Cornell University ing structured finance, stock and bond valuation,
Dr. Borek specializes in the application of microeco- damages, and solvency to major financial institutions
nomic theory, finance, and statistics to litigation and in a number of Enron-related litigations; evaluating
complex business problems. He has managed eco- anticompetitive behavior and allegations of consumer
nomic analyses in numerous complex corporate overcharges for software products; analyzing the
litigations, including cases involving securities fraud effects of a corporate restructuring on a company’s
and corporate governance issues. Much of his work, ability to satisfy its asbestos-related liabilities; devel-
both consulting and research, has addressed new oped models to analyze how much profit from the
technologies and consumer products. Dr. Borek’s sale of certain pharmaceutical drugs in the United
doctoral research examining employee stock owner- States should be attributed to the U.S. subsidiary,
ship plans was described in The Handbook of Labor thus subject to U.S. tax; and developed and evalu-
Economics (Volume 3b) which summarizes important ated models to assess the lost profits in a number of
contributions to the field in the prior decade. He has security broker raiding cases.
provided consulting support to numerous corpora-
tions, leading law firms, the U.S. Department of Nicholas I. Crew, Managing Principal; Ph.D. in
Justice and numerous States’ Attorneys General. Dr. Management with a specialization in Finance, John E.
Borek is also a Senior Policy Fellow in the Center for Anderson Graduate School of Management, University of
Business and Public Policy at Georgetown Univer- California, Los Angeles; B.A. in Mathematics, Rutgers
sity’s McDonough School of Business and previously College, Rutgers University
held positions with Ernst & Young’s Corporate Dr. Crew applies his background in finance and math-

Analysis Group Subprime Lending Litigation 19

ematics to matters involving valuation and damages matters related to mortgages and real estate. For
calculation, with particular emphasis on the valua- example, for Lomas Mortgage USA (LMUSA), once
tion and risk analysis of complex financial securities one of the country’s largest mortgage servicing-rights
and derivatives including corporate bonds, currency firms, she assisted in demonstrating that LMUSA
derivatives, and mortgage-backed securities. His case officials had disposed of assets for below-market
experience includes providing analysis and valuation prices. She has also estimated changes in the value of
of a MBS hedge fund in Granite Funds, L.P. v. Donald- real estate holdings and purchased mortgage servic-
son, Lufkin and Jenrette. He also specializes in analyses ing rights that resulted from the delay in declaring
related to 10b-5 securities fraud cases and stock price bankruptcy. More recently, she has contrasted forecast
behavior. In non-litigation matters, Dr. Crew has and actual CPR and PSA prepayment rates for
performed pricing analyses, risk assessment, and real mortgage pools. Ms. Evans has supervised and
option valuation for clients in the pharmaceutical and performed general damage analyses and developed
electric utility industries. He has published research discount rate and cash-flow analyses for the purposes
on regulatory policy and risk management. of determining lost profits or royalties. She has also
valued various types of assets, liabilities, projects, and
Mark H. Egland, Managing Principal; M.B.A. in firms. Ms. Evans has evaluated revenue-recognition
Finance, John E. Anderson Graduate School of Manage- policies and analyzed the effects of accounting choices
ment, University of California, Los Angeles; B.A. in and GAAP on financial statements and stock prices in
Mathematical Economics, Pomona College; CFA securities cases. Prior to joining Analysis Group, Ms.
Mr. Egland specializes in financial and environmental Evans spent several years as an attorney in the private
issues pertaining to litigation, with a focus on invest- sector, and worked for the Attorney General’s Office
ment suitability. He directs the firm’s risk manage- of the State of Alabama.
ment consulting work, which provides comprehen-
sive risk analyses of investment portfolios for private R. Jeffrey Malinak, Managing Principal; M.B.A.
and public clients. He led the team that valued the in Finance and Accounting, the Graduate School of
failed Orange County derivatives portfolio for the Business, University of Texas; B.A. in Social Sciences,
California State Auditor’s Office. Mr. Egland has Stanford University
conducted numerous analyses requiring calculation of Mr. Malinak is an expert in financial economics and
discounted cash flows for determining lost earnings, accounting, and has particular expertise on issues
profits, and asset and business values. He has valued related to securities, breach of contract, regulatory
a broad range of financial instruments and evaluated economics and antitrust. In the securities area, he has
the impact of various factors on stockholder wealth. frequently addressed issues such as the use of trading
In the environmental area, he has conducted studies data to estimate securities fraud damages, the calcula-
to evaluate the impact of hazards such as asbestos, tion of damages per share in 10b-5 matters, and the
lead, and soil contamination on property values. He impact of market forces and firm-specific information
has provided expert testimony in many environmen- on publicly-traded securities. He has prepared
tal matters and published his research in leading analysis and expert reports on damages issues in
environmental and real estate journals. support of experts in 10b-5 securities fraud cases and
has testified in deposition and at an arbitration
Elizabeth A. Evans, Principal; J.D., University of hearing on economic damages issues. Prior to joining
Alabama; M.B.A. in Finance, Accounting, and Statistics, Analysis Group, he was a principal of Putnam, Hayes
Graduate School of Business, the University of Chicago; and Bartlett in Washington, D.C.
B.A., University of Alabama; CPA; CFA; CMA
Ms. Evans, an economist and lawyer specializing in
finance and accounting, has been involved in many

Analysis Group Subprime Lending Litigation 20

Martha S. Samuelson, President and CEO; investments in more than one thousand companies,
M.S. in Management, Sloan School of Management, including several limited partnerships. In other trial
Massachusetts Institute of Technology; J.D., Harvard testimony, he opined concerning tax deductions and
Law School; B.A., Yale University tax recapture issues in a land development partner-
Ms. Samuelson is an expert in finance, antitrust, and ship. Mr. Sherwin was also a valuation consultant to
damages analyses, combining training in finance and the Irvine Company in a dispute with a minority
economics with five years as a practicing trial attor- shareholder regarding the value of that company’s
ney. A key aspect of her work is direction of economic extensive real estate holdings in Orange Country,
analyses for large-scale litigations. She has managed California. He has also provided deposition testimony
economic analyses in the Procter & Gamble v. Bankers in Bank Brussels Lambert v. Chase Manhattan Bank. Mr.
Trust derivatives litigation; lawsuits involving Sherwin has worked on such large-scale securities
Microsoft and issues of competition and pricing; cases as the Drexel Burnham Lambert and Executive
MasterCard and issues of competition; and class Life bankruptcies. He is a member of the American
action matters involving alleged improper sales Economic Association and the American and Illinois
practices by leading U.S. insurers. Ms. Samuelson has Bar Associations.
studied the pricing and risk characteristics of CMOs
and derivative securities generally, as well as issues of Laura B. Stamm, Managing Principal; M.S. in
portfolio composition, adherence to investment Management, Sloan School of Management, Massachusetts
guidelines, and suitability. Ms. Samuelson has worked Institute of Technology
with fund companies, boards, and regulators in some Ms. Stamm has provided expert testimony on eco-
of the largest settlements addressing market timing nomic, financial, and accounting analyses in a broad
and its impact. She has also served as an expert in array of complex commercial litigation matters. In
many phases of litigation, including development of addition to serving as an expert, she has managed
economic and financial models; preparation of cases involving the valuation of financial instruments
testimony; development, presentation and review of and has provided valuation analyses of privately-held
pretrial discovery; and critique of economic and companies. She has extensive consulting expertise
financial analyses of opposing experts. including assistance with pretrial discovery, develop-
ment of economic and financial models to analyze
Robert A. Sherwin, Managing Principal; J.D., damages, and preparation of expert reports and tes-
the University of Chicago Law School; A.B. in Economics timony. Ms. Stamm is a Certified Public Accountant
and Physics, Wabash College; CPA and a member of the Massachusetts Society of Certi-
Mr. Sherwin has testified in more than 60 matters fied Public Accountants, where she has served on the
involving such topics as securities, antitrust, tax, litigation support committee. She is currently assist-
regulatory, patent infringement, capital adequacy, and ing counsel in a number of matters involving stock
commercial damages matters. He has considerable options and backdating, including investigations
expertise in valuing and analyzing securities and by the Department of Justice and the Securities and
other ownership interests, including partnerships, Exchange Commission, as well as related lawsuits.
and has testified on these matters in litigation. In
Trammell Crow v. Peterson, which involved a Trammell Richard M. Starfield, Managing Principal;
Crow senior partner’s interests in approximately M.B.A. in Finance, Graduate School of Business, Columbia
1,800 partnerships involving more than 2,000 proper- University; Bachelors of Commerce and Accounting,
ties, Mr. Sherwin testified regarding valuation, University of Witwatersrand, Johannesburg, South Africa
taxation, and roll-up of “under-water partners.” He Mr. Starfield specializes in the application of econom-
also twice testified in court in the matter of Executive ics, finance and accounting to problems in complex
Life Insurance Co. regarding the estate’s considerable business litigation. He provided overall management

Analysis Group Subprime Lending Litigation 21

of the mortgage insurance cases involving allegations Dr. Strombom led the valuation practice of a middle-
of RESPA violations, and has significant experience in market merger and acquisition company that valued
litigation involving claims under federal and state hundreds of privately held companies annu­ally.
fraudulent conveyance statutes. He was responsible Earlier he was a Manager in the Financial Advisory
for the overall management of all aspects of the Services group of Price Waterhouse LLP.
financial and economic analysis in a fraudulent
conveyance litigation involving the Bank of New Keith R. Ugone, Managing Principal; Ph.D. in
England failure, one of the largest bank failures in Economics, Arizona State University; M.A. in Economics,
U.S. history. He also testified in one of the Winstar University of Southern California; B.A. in Economics,
cases. A core component of his Analysis Group role is University of Notre Dame
the direction and management of large-scale cases, Dr. Ugone’s experience in the subprime area includes
particularly those involving securities, including analyzing underwriting and loan servicing of sub-
some of the major settlements emerging from the prime automobile loans to address plaintiffs’ allega-
Enron bankruptcy. Mr. Starfield has also presented tions that the servicing company did not properly
damages analyses in bankruptcies and numerous administer the portfolio of subprime loans. He has
investment bank litigations involving 10b-5 and Sec. frequently evaluated lost profits and valuation-related
11 violations. He has extensive experience in investi- issues using large databases and complex computer
gations of fraud and cases involving accounting- models. Damage models constructed or analyzed by
related issues, in which he has performed in-depth Dr. Ugone have included such components as lost
review and forensic analysis of records. He was sales analyses, incremental cost analyses, assessments
formerly a Senior Manager in the Dispute Analysis of profitability, assessments of the capacity to produce
and Corporate Recovery Services group of Price additional units, the competitive business environ-
Waterhouse, and is a Chartered Accountant of South ment in which a damage claim is made, claimed lost
Africa, a member of the South African Institute of business value, and claimed reasonable royalties. In
Chartered Accountants, and an Authorized Public addition to damages-related analyses, he has con-
Accountant in the United Kingdom. ducted economic impact assessments, cost/benefit
and risk assessments, and multiple fraud and crimi-
Bruce A. Strombom, Managing Principal; nal-related engagements involving alleged embezzle-
Ph.D. in Economics, University of California, Irvine; ment, Medicare fraud, and overcharge damages.
B.A. in Economics, San Jose State University Dr. Ugone has testified at trial and in deposition
Dr. Strombom is an expert in quantitative and more than 100 times.
statistical analysis, the estimation of commercial
damages and the valuation of privately held compa- D. Lee Heavner, Vice President; Ph.D. and M.B.A.,
nies, derivative securities and other assets. He has Graduate School of Business, the University of Chicago;
performed research and testified in matters involving B.S., Economics, Massachusetts Institute of Technology
antitrust, breach of contract, fraud, intellectual Dr. Heavner has consulted on a wide variety of
property, labor and employment, real estate, securities finance and antitrust matters. In recent matters, Dr.
and tax issues. His experience includes analysis of Heavner supported an expert opining on the commer-
loss causation and damages in bankruptcy matters, cial reasonableness of a securitization program. He
investigation of predatory lending claims against a also supported an expert in the evaluation of projec-
subprime originator, and evaluation of the loan tions for the housing and home mortgage businesses.
repurchase obligations of a mortgage lender. He is His finance experience also includes matters involv-
co-author of reports on real estate conveyance ing investment suitability, portfolio management,
practices, closing costs and competition in title mutual fund fees, retirement plan fees, securities
insurance markets. Prior to joining Analysis Group, fraud, and market efficiency. Dr. Heavner formerly

Analysis Group Subprime Lending Litigation 22

taught economics and finance at Tulane University’s Frank Voorvaart, Vice President; Ph.D., M.S., and
A.B. Freeman School of Business. B.S. in Economics, Arizona State University
Dr. Voorvaart specializes in real estate litigation
Ted Laguerre, Vice President; Completed Ph.D. consulting, economic analysis, and econometrics, and
coursework in Management, Sloan School of Management, has testified regarding appropriate valuation and
Massachusetts Institute of Technology; M.B.A., Boston damages estimation methodology. He has evaluated
University; B.A. in Economics, Dartmouth College; CPA class certification criteria and property value diminu-
Mr. Laguerre has managed case teams in matters tion claims in residential class action litigation. He has
involving securities (equity, fixed income, and also evaluated and rebutted the validity and applica-
derivative), valuation, financial analysis, mutual bility of opposing experts’ valuation methodologies to
funds, accounting, and general damages. Some of the determine damages on a class-wide basis. Dr. Voor-
recent cases that he has managed include: estimating vaart is a member of the Section of Litigation of the
the effects of a company’s marketing and R&D efforts American Bar Association, an associate member of the
on its stock price performance; estimating the dam- Appraisal Institute, and a member of the American
ages associated with an allegedly improper early Real Estate Society and the National Association of
redemption of debt securities; estimating the effect of Forensic Economists. n
short-term trading in a mutual fund complex; and
analyzing a company’s methods of accounting for
financing transactions and their effect on its percep-
tion by the financial markets. Prior to joining Analysis
Group in 1999, Mr. Laguerre worked with clients in a
consulting capacity at Price Waterhouse and Arthur
Andersen, in their Audit (high tech and mutual
funds) and Strategy, Finance and Economics (valua-
tion and financial modeling) practices, respectively,
and as a senior financial analyst for Staples.

Mike Nguyen, Vice President; M.B.A. in Finance

and Accounting, John E. Anderson Graduate School of
Management, University of California, Los Angeles; B.S.
in Mathematics, University of California, Los Angeles
Mr. Nguyen specializes in financial and statistical
issues pertaining to litigation and other complex
business matters, with a particular focus on business
valuation. He has conducted damages assessments in
cases involving securities, real estate, breach of
contract, statistical sampling, and investment suitabil-
ity. He has performed numerous valuations of
business enterprises that are used in strategic advi-
sory and litigation settings. Within the real estate
sector, Mr. Nguyen has performed valuations of real
estate developments and analyzed issues related to
low-income housing.

Analysis Group Subprime Lending Litigation 23