CapMarket Consulting is experienced in using industry tools in litigation and quantifying credit, market and operations risks often required to effectively characterized complex financial transactions and uncover the economic intent and substance of the financial transactions, structures and/or vehicles.
Often the issue in securities and capital markets litigation is the proper characterization of financial transactions. Our approach to characterizing these transactions, structures and/or vehicles examines the industry financial risks and capital market features. Our characterization approach is differentiated based upon experience trading, structuring and risk managing these transactions, structures and/or vehicles in the capital markets.
Our characterization process involves analyzing the:
- Purpose and Design
- Specific Risk Taken – whether it be Market, Credit or Operations Risk
An important issue in much litigation is how a structure is characterized, for example should a transaction be characterized as a "sale" or a "loan". While a transaction may be structured to contractually be a sale or a loan, the actual capital market features and resulting financial risk will be illustrative in uncovering the economic intent and substance of the structure. Assessing the capital market features and actual risk – credit, market or operations risk – is not a traditional economic exercise and is often best achieved through the use of capital markets industry tools.
