Calculating Damages In Securities Contract Breach Cases

Thu Oct 08 00:00:00 EDT 2015
Dr. Marcia Kramer Mayer

Calculating Damages In Securities Contract Breach

This article from Law360 explores the recent decision in Kozel v. Kozel in which expert testimony by NERA Senior Vice President Dr. Marcia Kramer Mayer was key in the court’s final decision. NERA was retained by the plaintiff's counsel to opine on damages for the delayed delivery of stock that was priced higher when delivered than at breach.

Dr. Mayer’s expert testimony quantified the price impact of seller-initiated volume—or rather, volume executed below the mid-quote— by analyzing a year of GKP transactions and quotations data in conjunction with an industry index. She then used her econometric model to determine how much additional seller-initiated volume the market could have accommodated subject to a daily price impact constraint of 1, 2, or 3%. For each such constraint, she identified the two reasonable periods and their relevant prices.  On 11 September 2015, the Honorable Nancy K. Donnellan of the Twelfth Judicial Circuit in and for Sarasota County, Florida awarded Ms. Kozel $34.6 million in damages, as called for by Dr. Mayer's Madison Fund Rule analysis using a 2% price impact constraint.

Download the full article from Law360 to learn more about how Dr. Mayer's econometric analysis of damages featured prominently in the Kozel v. Kozel decision.