Richard Bell et al. v. Ascendant Solutions, Inc. et al.

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The plaintiffs alleged that Ascendant made various misstatements in its IPO Prospectus and Registration Statement concerning its customer relationships and computer system capabilities.

Retained by Akin Gump Strauss Hauer & Feld

The plaintiffs alleged that Ascendant made various misstatements in its IPO Prospectus and Registration Statement concerning its customer relationships and computer system capabilities. The plaintiffs filed a motion to certify a class of Ascendant investors for a ten-week period following the IPO. The plaintiffs claimed via expert testimony that Ascendant traded in an efficient market, a necessary element for certifying the class.

The judge denied the plaintiffs’ motion for class certification.

Cornerstone Research assisted Professor Paul Gompers of the Harvard Business School in evaluating whether Ascendant traded in an efficient market as well as in assessing the plaintiffs’ market efficiency analysis. A study of the Cammer factors, an event study, and a fundamental valuation analysis showed that Ascendant did not trade in an efficient market during the class period. Further, in a rebuttal report Professor Gompers showed that the plaintiffs’ market efficiency analysis was flawed and not based on any scientific method. With the help of Professor Gompers’s testimony, the judge found the plaintiffs’ expert testimony to be inadmissible and denied the motion for class certification.

Case Expert

Paul A. Gompers

Eugene Holman Professor of Business Administration,
Harvard Business School,
Harvard University;
Senior Advisor, Cornerstone Research