M. Perry’s Motion in Limine to Exclude Testimony of Professor Anthony Saunders


“Saunders testified that the best indicator of materiality is a company’s stock price.”

“Indeed, Saunders testified that, “(n)aturally,” such a stock-price analysis was “the first thing” he did in this case to assess whether the alleged misstatements and omissions were material.”

“When he found that this analysis could not support the SEC’s allegations, however, Saunders “didn’t keep it (he had it destroyed or discarded) because for obvious reasons I wasn’t using it”.”

“Instead, Saunders elected to submit an expert report containing materiality opinions based on his subjective speculation about what reasonable investors may have deemed important.”

“Whatever expertise Saunders may have with respect to the operations of “commercial banks and other financial institutions,” he acknowledges that he is not an “expert on disclosure”….He has no way of knowing how investors would have interpreted additional disclosures about Indymac in 2008 without more rigorous analysis.”

“The remainder of Saunders’ report…indeed, the bulk of the report…..consists of a slanted, narrative recounting of Indymac’s public filings, analyst reports, and the SEC’s allegations. This testimony is in admissible, as it will not “help the trier of fact to understand the evidence” in this case.”

“Indeed, in restating the contents of these documents, Saunders does not even attempt to place them in the context of the “total mix of information” available to investors at the time, in order to aid the Court’s understanding of whether additional information would have been material.”

“In order to reach these conclusions, he “assume(d) that the facts alleged in the SEC’s Complaint in this case are true”…..”

(Professor Saunders states, ‘For the purposes of preparing this report and developing the opinions expressed herein, I assume the facts as alleged in the SEC’s complaint in this case are true.’ (Saunders Report Paragraph 8).)

“Because Saunders’ materiality opinions are speculative and unreliable, they should be excluded. Similarly, Saunders’ interpretation of newspaper articles, analyst reports, and other non-technical sources would be of no assistance to the Court and is therefore inadmissible.”

Click here to access entire document

Posted on May 25, 2012, in Postings. Bookmark the permalink. Leave a comment.

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