Misreporting and share price manipulation

Brattle worked on a case relating to actions by the ex-CEO of KIT Digital, a software company, to transfer company funds to a hedge fund and trade the company’s common stock to artificially inflate its share price and trading volume. We analyzed the company’s financial accounting practices and reporting, particularly relating to its revenue recognition practices and its representations to auditors, analysts, and investors regarding certain contracts and acquisition activity. This allowed us to assess the collective impact on the company’s market value and the market performance of its publicly traded common stock over the relevant time period of the fund transfers, hedge fund trading activity, financial reporting, and (mis)representations. In an independent analysis following the verdict in the case, a Brattle expert testified about the stock price impact of the alleged fraud for sentencing purposes.