Yan Cao specializes in matters involving financial markets, financial institutions, and financial accounting. Dr. Cao has fifteen years of consulting experience on issues of trading and market manipulation, securities, valuation and M&A, and bankruptcy and restructuring.
In particular, Dr. Cao has assessed pricing and trading issues related to equity, fixed income, commodities, FX, structured products, and derivatives. She has also consulted on matters involving company valuation, solvency, risk management, corporate governance, and damages. Her case experience covers various industries, with an emphasis on banking, broker-dealers, and other financial institutions.
Dr. Cao’s consulting experience includes substantial expertise with regulatory and internal investigations. She has presented analysis to multiple regulatory agencies and to corporate management. Dr. Cao also works with experts in all stages of arbitration and litigation, including trial.
Regulatory investigations and white collar litigation
Dr. Cao has consulted to clients on regulatory and internal investigations, civil litigation, and criminal litigation matters led by the U.S. Department of Justice (DOJ), Commodity Futures Trading Commission (CFTC), Securities and Exchange Commission (SEC), the New York State Department of Financial Services, the New York Federal Reserve, the U.K. Financial Conduct Authority (FCA), Germany’s Federal Financial Supervisory Authority (BaFin), and the Australian Securities and Investments Commission (ASIC).
Dr. Cao leads Cornerstone Research’s market manipulation and market microstructure initiatives. She has experience in:
- Consulting on alleged market manipulation and collusive conduct across a range of financial markets, such as spoofing in U.S. Treasury, precious metals, index futures, and FX markets; interest rate and metals benchmark manipulation; disruptive trading in futures markets; spread manipulation in bond markets; algorithmic trading, order handling, and “Last Look” practices in FX markets; and front-running and pre-hedging practices in swaps markets
- Evaluating order and execution patterns, risk exposure, and trading and hedging strategies
- Assessing alleged price impact, ill-gotten gains, and loss exposure
Securities class action litigation
Dr. Cao has worked on a number of notable securities class action matters, including Moody’s Securities Litigation, in which the court denied class certification and granted summary judgment; and IBEW Local 90 Pension Fund et al. v. Deutsche Bank AG et al., in which the court denied class certification. Other elements of her securities work include:
- Consulting on Section 10b, Section 11, and Section 12 litigation, including market efficiency, price impact, materiality, loss causation, and damages at the class certification and merits stages for equity, corporate bonds, and preferred securities
- Assessing claims involving exchange-traded and over-the-counter securities
- Evaluating damages and settlement estimates, as well as mediation strategies
Financial accounting, internal control, and tax disputes
Dr. Cao applies her accounting expertise to financial accounting, financial reporting, and internal control issues arising in regulatory investigations and litigation. She has analyzed securitization, financial instruments, and derivatives, and also assessed the value relevance and price impact of financial disclosures. Dr. Cao has consulted on tax-related matters, notably executive compensation and the economic substance of transactions.
Valuation and M&A
In M&A transactions, Dr. Cao has analyzed company and transaction valuations in connection with issues of fairness opinion and deal price. She has supported experts to address issues related to deal process, corporate governance, and hedge fund activism. In addition, for matters involving alleged breach of contract and shareholder consent right violations, she has analyzed damages claims.
Structured products
Dr. Cao has consulted on numerous litigation matters involving mortgage-backed securities (MBS) and collateralized debt obligations (CDOs), addressing loan underwriting, credit rating, valuation and risk assessment, financial reporting, loss causation, and sampling, among others. She has also addressed loss causation and damages issues in multiple litigation and arbitration matters related to auction rate securities (ARS) and variable rate demand obligations (VRDOs).
Prior to joining Cornerstone Research, Dr. Cao taught financial accounting at the University of Rochester. Previously, she worked at Bain & Company and Arthur Andersen in China.