The Securities Litigation Expert Blog

Accelerant Arbitration Market Indicator Flashes Highest Sell Signal Since 2000

Posted by Jack Duval

Nov 13, 2013 8:38:39 AM

The Accelerant Arbitration Market Indicator printed at 1.42, the highest since 2000.  

Two quick take-aways:

  1. For securities litigators: the lull in filings is probably in the ninth inning;

  2. For investors:  Caveat emptor.

You can also link to the visualization (which also has a comparison of the FINRA arbitration filings and the S&P 500) here.


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Topics: FINRA, Statistics, Data Analysis, litigation, investments, analytics, Accelerant Arbitration Market Indicator, FINRA Arbitration, Law Firm Analytics, Predictive Analytics

Arbitrator Analyzer™ Product Simplifies FINRA Rank and Strike List Review

Posted by Jack Duval

Jun 17, 2013 9:32:35 AM

Accelerant has just released it's newest product, the Arbitration Analyzer.

The Arbitrator Analyzer™ is a tool that enables attorneys to quickly and efficiently review, analyze, evaluate, and drill down on FINRA arbitrators and their publicly available awards.



    • Elegant and simple visual display of arbitrator data;

    • Dynamic, real time filtering by various factors, including: age, number of publicly available awards, and total amount of awards;

    • “At-a-glance” understanding of Rank and Strike list composition;

    • Instant drill down into individual awards;

    • Fast turn around times.

Arbitrator Analyzer from Accelerant LLC on Vimeo.



$700 for basic workup.

Custom analyses available.

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Topics: FINRA, securities, Data Analysis, Rank and Strike List, data analytics, litigation, arbitration, analytics, SEC, Accelerant Products, Law Firm Analytics, Arbitrator Analyzer, product;, Predictive Analytics

How Big Data is Changing the Legal Services Landscape

Posted by Jack Duval

May 13, 2013 4:07:41 AM

Big law firms and their corporate clients are engaging in a kind of data warfare, where each is analyzing massive databases of legal billing data and using them in negotiations.  (ABA)  Some highlights include:

Lexis Advance MedMal Navigator:  This product allows you... to determine in 20 minutes - versus 20 days - if a case is worth taking on... and it gives them analysis on available expert witnesses, including insight into the kinds of cases those witnesses have participated in and the type of testimony they offered.

TyMetrix LegalView:  The service aggregates the invoices of tens of billions of dollars of legal spending on an ongoing basis ... Many have used our LegalView data warehouse to compare their rates and understand the best way to position themselves with clients - low-cost provider or high-end value player.

Sky Analytics:  (advises) users on whether to approve, reject or reduce increases in hourly rates requested by outside law firms.  The primary variables the tool analyzes are an attorney's years of experience, his or her position in the firm, the law firm size and the cost of living where the attorney is based.

In five years, I think the entire legal services ecosystem will look different than it does today.  Those law firms that can run themselves like a business will succeed and those that hold on to the billable hour will suffer.
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Topics: big data, Statistics, Data Analysis, litigation, legal services, analytics, Law Firm Analytics

SEC Using Algos to Detect Fraud

Posted by Jack Duval

Feb 19, 2013 2:51:31 AM

The SEC is using algorithmic methods to analyze financial statements from public companies to detect fraud.  (WaPo)

 (the) software package... will stream real-time trade data from the exchanges into the agency’s headquarters. Rather than build the technology from scratch at great expense, the agency purchased it from a New Jersey firm called Tradeworx. The project, called Market Information Data Analytics, or MIDAS, is in the final testing phases.

The SEC has used similar programs to analyze hedge fund returns.  See our previous coverage of SEC uses of big data techniques here.
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Topics: big data, Statistics, Data Analysis, fraud, litigation, analytics, SEC, Compliance, regulation., Predictive Analytics, Analytic Talent

The Death of the Billable Hour

Posted by Jack Duval

Feb 18, 2013 2:03:17 AM

Here's an extract from a New York Times article from a while back about the anachronistic billable hour and why it should finally be laid to rest.  (NYT)  Some key takeaways:

From the law firm’s perspective, billing by the hour has a certain appeal: it shifts risk from the firm to the client in case the work takes longer than expected. But from a client’s perspective, it doesn’t work so well. It gives lawyers an incentive to overstaff and to overresearch cases. And for me, hourly billing was a raw deal. I ran the risk of being underpaid because I answered questions too quickly and billed a smaller number of hours.

By applying an industrial-age mind-set to 21st-century professionals, many organizations are undermining incentives for workers to be efficient. If employees need to stay late in order to curry favor with the boss, what motivation do they have to get work done during normal business hours? After all, they can put in the requisite “face time” whether they are surfing the Internet or analyzing customer data. It’s no surprise, then, that so many professionals find it easy to procrastinate and hard to stay on a task.

There is an obvious solution here: Instead of counting the hours you work, judge your success by the results you produce. Did you clear a backlog of customer orders? Did you come up with a new idea to solve a tricky problem? Did you write a first draft of an article that is due next week? Clearly, these accomplishments — not the hours that you log — are what ultimately drive your organization’s success.

In 10 years, I believe the billable hour will be the "alternative fee" and almost all engagements will be of the fixed fee variety.
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Topics: Data Analysis

New Predictive Analytics Book

Posted by Jack Duval

Jan 7, 2013 3:10:48 AM

Eric Siegel has a new book out called Predictive Analytics: The Power to Predict Who Will Click, Buy, Lie, or Die.  You can read the preface here.

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Topics: Eric Siegel, Statistics, Data Analysis, book, Predictive Analytics

Happy New Year!

Posted by Jack Duval

Jan 1, 2013 3:49:50 AM

I've been taking it easy over the past few days, but will be picking up the Accelerant blog in earnest again tomorrow.

Congratulations to all the Accelerant blog readers who survived the Mayan Apocalypse!

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Topics: Data Analysis, apocalypse

Happy Holidays!

Posted by Jack Duval

Dec 25, 2012 4:04:25 AM

Best wishes to all the readers of the Accelerant Blog.  I hope 2013 is a great year for you!

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Topics: Data Analysis

ISDA Response to Dodd-Frank

Posted by Jack Duval

Dec 14, 2012 3:54:24 AM

The International Swaps and Derivatives Association has submitted a 39 page comment on the Dodd-Frank Act.  (ISDA)

Here is the extract of their key points:

Initial Margin ("IM")

  1. Negative consequences of IM. As proposed, the IM requirement could severely challenge the resiliency of the financial system and will severely curtail the use of uncleared swaps for hedging, which would disrupt key financial services, such as those that provide for wider availability of home loans and domestic and international corporate finance.

  2. Proposed alternative. In lieu of IM, systemic risk can be effectively mitigated by: imposing VM requirements with daily collection (subject to limited exceptions) and zero thresholds; implementation of appropriate capital requirements, and mandatory clearing of liquid standardized swaps.


  1. Timing and Consistency. The Prudential Regulators' margin rules should be coordinated and consistent with the margin requirements of the CFTC, the SEC and regulators in other major financial jurisdictions. The Prudential Regulators should re-propose their rules on margin after they have had the opportunity to review and consider the final findings of the Basel/IOSCO Working Group and the SEC's proposed margin rules.

  2. Phase-In/Clearing: Compliance with the margin requirements should be phased- in over time and no earlier than the clearing requirements for the same asset class. The proposed time period of 180 days for implementation of the final rules is insufficient. The effective date for margin requirements for a given asset class should follow the implementation of mandatory clearing for that asset class.

Scope: Entities – We re-emphasize the recommendation that end-users, special purpose vehicles ("SPVs") and state and municipal government entities be excluded from the margin requirements. ISDA's position is that all sovereigns and central banks should post margin in order to achieve international comity. Unilateral action by a regulator in the U.S. or any other jurisdiction would be damaging to market participants and market liquidity.

Margin Calculation - We strongly recommend that the collection of IM not be required. While the Dodd-Frank Act provides for IM requirements for bank swap dealers, the Prudential Regulators have latitude in how they address that reference to IM and should consider the severe negative consequences of the proposed IM requirements. If the Prudential Regulators find it necessary to require the collection of IM, IM should be collected on a static basis, the amounts should be low and thresholds should be allowed as determined by the CSEs. In addition, calculation and posting of IM on or before execution date should not be required.

The proposed standardized tables would result in excessive IM requirements. Based on our review of aggregated QIS data from eight leading banks (which represent 45-50% of the total notional amount of the swap market), ISDA estimates that the amount of IM required using the standardized tables as proposed in the Study and the PR Proposal would be over $10.2 (in the Study)/7.6 (in the PR Proposal) trillion, over 6 times that required if an IM model were used.7 One way to address this issue would be to allow netting. The current proposal does not allow netting when the standardized table is used to calculate IM, whereas the Study and SEC proposals allow some netting with use of the standardized table.

  1. Netting – In general, netting that is legally enforceable should be permitted. The Prudential Regulators should also allow portfolio-based margining across cleared and uncleared swaps, other products and across legal structures. The Study allows netting within asset class when a model is used, and across comparable contracts with the schedule is used. The Prudential Regulators should also consider the approach proposed by the SEC, which allows broad netting for margin.

  2. Collateral

    1. Eligible collateral. Eligible collateral and applicable haircuts should be determined by the CSEs. At a minimum, the rules should adopt a broader range of eligible collateral as proposed by the Study. Alternatively, the Prudential Regulators' final rules may avoid specifying types of products and securities as eligible, as proposed by the SEC, subject to prescribed haircuts.

    2. Segregation. If IM is required, segregation and third party custody for IM should be at the agreement of the parties and not be required by regulation.8 CSEs should be allowed to offer asset protection mechanisms other than third party segregation that would provide that collateral be "immediately available" as recommended by the Study; e.g. segregation on the books of the CSE. The SEC proposal provides that SBSDs hold collateral in an account under the control of the SBSD and third party segregation is at the election of the counterparty that is not an SBSD. Parties posting collateral should have the option to allow the CSE to re-hypothecate the collateral.

  3. Inter-Affiliate Swaps - As stated in the prior letter to the Prudential Regulators, inter- affiliate trades should be excluded from margin requirements. Swaps between affiliates do not add systemic risk. Such trades are used to internally allocate risk and encourage centralized risk management. Imposition of margin requirements on inter-affiliate trades would add cost and inefficiency to internal risk management.

  4. Cross-Border Trades - Affiliates of U.S. persons should not be treated as U.S. persons under the margin rules, as proposed by the CFTC in its cross-border guidance. For swaps involving multiple jurisdictions, non-U.S. regulatory regimes should be recognized. 

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Topics: Data Analysis, Swaps, ISDA, Dodd-Frank, initial margin

Predictive Analytics for Banking Conference

Posted by Jack Duval

Dec 6, 2012 8:45:22 AM

I'm a little late on this, but IE is sponsoring a predictive analytics conference for the banking industry, it runs two days and starts today.  (IE)  Many heavy hitters from the big banks.  I can't go, but it looks very interesting.

You can also get their on-demand content here.

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Topics: IE, Statistics, Data Analysis, finance, banking, risk, Compliance, Predictive Analytics, education

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