PERCENTILE LEGAL EXPENSE
30% $100,000
50% $100,000
60% $100,000
75% $100,000
   
AVERAGE: $100,000
   
   
SECURITY CLASS ACTION ESTIMATE SERVICE


STATISTICAL ANALYSIS OF SECURITIES CASE FILED AGAINST (companyname0)
PERCENTILE LEGAL EXPENSE
30% $100,000
50% $100,000
60% $100,000
75% $100,000
   
AVERAGE: $100,000
   
   

WHAT ARE THE DEFENDANT'S LEGAL FEES?

The table at the right shows the probability distribution for the Defendant's Legal Expenses for this case. The best estimate is the median (insert median here). Defendant's should expect to pay (insert median here) for their legal expenses.

 

The Defendant's Legal fees for this case is the result of simulating legal fees as a percentage of indemnity payments by insurance companies for similar cases. Please see the (methodology) section of this report.

The results are interpreted as a 30% chance that the defendants will pay(defendantthirtypercentile). There is also a 25% chance that the legal expenses will exceed (defendantseventyfivepercentile).

 



PERCENTILE TIME (years)
30% 1
50% 2
60% 3
75% 5
   
AVERAGE: 6
   
   

Analysis of (companyname8)'s Stock Price.



The table to the right shows the probability for (companyname9)'s stock price. The case was filed on (filedate). The movement of stock price is being projected based on the movement in stock prices for companies with similar securities cases against them.

The table to the right is interpreted as 30% of the time the stock will be below(stockthirtypercentile-1year) after (1 year date). Conversely, the stock will be above (2 year date percentile), 70% of the time after two years.

The risk to shareholders, who continue to hold onto their stock, is that there is a 30% chance that the stock falls below (2yeardate thirtypercentile). For those whose 401K and stock plans should consider if this risk is worth it when other investments are available. Also, there is limited upside as the stock will trade in a range of (median) to (85th percentile) over a few years.

 Situations which might case the stock to fall below (30percentile) are:

For those considering buying the stock, a range of (thirtyperc-2 yr) to (median) makes the odds 50% to 70% that the stock will be higher than purchase price.

 (Our conclusion from inputs)

 

 

Methodology

 

A database of security class action settlements was used to generate the results of this report. The term "exposure to loss" in the analysis refers to the maximum change in value of the securities during the class period.

Using the database, statistical distributions were derived for:

1. Settlement as a percentage of the exposure to loss.

2. Plaintiff's Legal Expenses as a percentage of Settlement.

3. Defendant's Legal Expenses as a percentage of Total Settlement (Plaintiff's legal expenses plus amount returned to shareholders).

4. Time to settle the case.

5. Probability of case being dismissed or settled.

The statistical distributions were used to create a simulation which generated the results shown in this report. The methodology relies on the empirical distributions obtained from previous security class action cases.

 

 

 



DATE 10% 30% 50% 60% 70% 75% 85%
07/01/2009 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51
07/01/2009 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51
07/01/2009 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51
07/01/2009 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51
07/01/2009 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51
07/01/2009 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51
07/01/2009 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51
07/01/2009 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51
07/01/2009 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51
07/01/2009 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51
07/01/2009 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51
07/01/2009 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51 $110.51
SECURITY CLASS ACTION ESTIMATE SERVICE
PERCENTILE SETTLEMENT
30% $100,000
50% $100,000
60% $100,000
75% $100,000
   
AVERAGE: $100,000
   
   

                               


SUMMARY OF POTENTIAL SETTLEMENT AND LEGAL EXPENSES 

PERCENTILE TOTAL COST OF CASE
($000s)		 PLAINTIFF'S SETTLEMENT
($000s)		 PLAINTIFF'S LEGAL FEES
($000s)		 DEFENDANT'S LEGAL FEES
($000s)		 LENGTH OF CASE
(YEARS)
30%

$0

 $0 $0 $0 $0
50% $0 $0 $0 $0   $00
60% $0    $00    $00 $0 $0
75% $0   $00   $00 $0 $0

 

PERCENTILE is the probability that the quantity shown is less than or equal to that value. For example the probability that the Total Cost of the case is less than or equal to (totalcostthirtypercentile) is 30%.

TOTAL COST of the case refers to the Total Cost of the case for the defendants.

PLAINTIFF'S SETTLEMENT refers to the settlement the shareholders receive and their legal expenses combined.

LENGTH OF CASE refers to the time it takes to settle or dismiss the case.

 

INTRODUCTION

Security Class Action Cases create problems and opportunities for everyone involved with a company being sued for securities violations.  This report will give you an edge on decisions about (companyname3) shares and options. We estimate the cost of the case for (companyname4) and the effect on the company’s share price through 2011.

 This report is a statistical analysis of the Security Class Action Case filed against (companyname5). (ticker symbol is BAC). The case was filed on January 21st, 2009 in Federal Court.

 This case is filed under section 14a of the Securities Exchange Act 1934. BANK OF AMERICA’s management is alleged to have failed in properly disclosing exposure to the declining value of subprime mortgage related derivatives.  Details of the case may be found on Stanford's website.

 Our conclusion is that Toyota will pay shareholders approximately $201 million to settle this case. $201 million represents the median settlement Toyota would pay when settlement is compared to settlements in other security class action cases. After comparing Toyota's stock price drops mentioned in the complaint to movements in the market and Toyota's competitor's stock price movements, the class can prove (statistically) that Toyota's actions during the classperiod caused Toyota's share price to drop as a result of management's actions.

The share price for Toyota is expected to be below $90 (60% to 70% chance) for the next two years. The risk to shareholders is that their investment in this company is that the stock falls into a range of $30 to $60 and never recovers (probability of 30%). Although Toyota is the leading auto company at the moment, the stock price of other companies in similar situations suggests that it will take over 2 years for Toyota to come back.

 

What is the Total Cost of the case for (company name6)?

  

The table at the right shows the probability distribution for the Total Cost of the case. The best estimate is the median Total Cost, (insert median here). (company name7) should expect to pay (insert median here) for settlement and legal expenses.

 

The Total Cost of the case is the result of simulating potential settlements, potential plaintiff legal expenses and potential defense expenses. Please see the(methodology) section of this report.

The results are interpreted as a 30% chance that the Total Cost for the plaintiffs will be less than (totalcostthirtypercentile). There is also a 25% chance that the Total Cost will exceed (totalcostseventyfivepercentile).

 

 

 

PERCENTILE TOTAL COST
30% $100,000
50% $100,000
60% $100,000
75% $100,000
   
AVERAGE: $100,000

WHAT SETTLEMENT WILL THE PLAINTIFFS RECEIVE?

The table at the right shows the probability distribution for the Settlement of the case. The best estimate is the median Settlement, (insert median here). Shareholders should expect to receive (insert median here) after their legal expenses.

 

The Settlement of the case is the result of simulating potential settlements based on a distribution of actual settlement values for other securities cases as a percentage of exposure to loss in those cases. Please see the(methodology) section of this report.

The results are interpreted as a 30% chance that the plaintiffs will receive (settlementthirtypercentile). There is also a 25% chance that the plaintiffs return will exceed (settlementseventyfivepercentile).

 

WHAT ARE THE PLAINTIFF'S LEGAL EXPENSES?

The table at the right shows the probability distribution for the Plaintiff's Legal Expenses for this case. The best estimate is the median (insert median here). Plaintiff's should expect to pay (insert median here) for their legal expenses. This payment would be expected to come out of a settlement or judgment.

 

The Plaintiff's Legal fees for this case is the result of simulating legal fees as a percentage of settlements based on a distribution of actual settlement values and the legal fees for  securities cases. Please see the(methodology) section of this report.

The results are interpreted as a 30% chance that the plaintiffs will pay (plaintiffthirtypercentile). There is also a 25% chance that the legal expenses will exceed (plaintiffseventyfivepercentile).

 

What is the Expected Time to Settle or Dismiss this case?

The table at the right shows the probability distribution for the time to settle or dismiss this case. The best estimate is the median (insert median here).


The time it takes to settle or dismiss is based on a distribution of similar securities cases. Please see (methodology).

PROJECTED SHARE PRICE FOR (COMPANYNAME10)

FROM (3monthdate) TO (3yeardate)
 
PERCENTILES 

 



STATISTICAL TESTS FOR LOSS CAUSATION

After comparing how Toyota's stock behaved when the recall was announced on 1/1/2010, the probability of observing the 10% drop in stock price after 30 days is less than 15%. The plaintiffs experts should be able to show that the recall and Toyota's actions involving the recall were the proximate cause of the stock's decline in value.