EXPERTISE

COMPLEX SECURITIES AND DERIVATIVES

Our world-class financial industry experts have experience working extensively on the structuring, servicing, and valuing securities such as:

Fixed income
Structured Finance Products (ABS, CMBS, RMBS, CDO)
OTC derivatives products, such as interest rate swaps (IRS), credit default swaps (CDS), and exotic derivatives
Exchange traded derivatives.

Fixed Income - Our experts possess Mortgage banking and Loan Servicing experience at Executive level management for leading financial institutions. Our expertise includes default loan servicing, foreclosure, loss mitigation, collections, short sales, real estate marketing, loan servicing contracts, pooling and servicing agreements, loan defects and loan repurchase.

Structured Finance Products - Our experts and consultants have first-hand industry experience supporting and modeling complex credit instruments, such as cash and synthetic Collateralized Debt Obligations (CDOs), Collateralized Loan Obligations (CLOs), Asset Backed Securities (RMBS and CMBS), Asset Backed Commercial Paper (ABCP), Structured Investment Vehicles (SIVs), as well as related credit securities issued by other types of conduits.

Derivatives - Our experience in derivatives covers trade, settlement, modeling, pricing, ISDA documentation, collateral provision and protocols, regulatory framework and reporting requirements, market participant’s roles and relationships, and other related operational activities. We have a strong knowledge of single name, index tranche, and CDS indices, as well as fixed-floating interest rate swaps (plain vanilla and complex).

Our team has also been exposed to other OTC and exchange derivatives such as; options, futures, forwards, FX and Total Return Swaps, as well as an exotic derivative with complex payoff features. Our expertise in derivatives markets and instruments was applied in several high-stake disputes and litigation cases.

SEDA Experts’ in-depth knowledge and hands-on experience in both complex securities and derivatives is a result of several years of industry experience handling such instruments before and after the 2007-2009 market disruption, as well as within litigation and dispute contexts. Such industry and litigation exposure allow SEDA Experts to be well-versed in such transaction structures, mechanics, interested parties, transaction set-up process, modeling, ongoing management and administration, and regulatory framework.

Representative Engagements

U.S. Largest Insurance Company Stockholder v. U.S. Government
SEDA Experts assisted law firm representing an Insurance company’s largest shareholder’s claim against the U.S. Government for alleged misappropriation of the company’s stock without compensation, in connection with the company’s considerable exposure to Credit Default Swaps (CDS) that ultimately caused the insurance company liquidity to dry-up. SEDA team worked with various expert witnesses and reviewed and advised on topics such as CLO/CDO exposure, CDS default probability, and also on Securities Lending Program size, risk, and exposure.
Top Tier European Bank v. Large Asset Management Company
SEDA Experts assisted Defendants on the claim by Investment Bank (Funding Agent) over the termination amount of hybrid CDOs warehouse that failed to close, in connection with hedges placed against the warehouse assets, and their potential mitigation impact in the final warehouse losses claimed by the Investment Bank. SEDA team assessed the overall warehouse portfolio, including all hedging positions in order to calculate the net gain/loss for the warehouse upon termination event.
Federal Bank v. Investment Bank Liquidation Trustee
SEDA Experts assisted the Plaintiff on a Dispute (Mediation) over the termination amount of the interest rate swaps executed between both parties, due to bankruptcy of the swap counterparties (i.e. the Investment Bank). SEDA team assessed and valued over 300 interest rate swaps (vanilla, call and put option, cap, floors, KOs) as of swap termination dates.
Class Action v. Major Investment Banks and Derivative Market Participants
SEDA Experts assisted Plaintiff on a Class action brought by several credit default market participants against ISDA broker dealers and their major third-party pricing provider due to alleged price collusion and manipulation.
Large Mexican Retail Chain Company v. Major Investment Banks
SEDA Experts assisted Plaintiff on claim against various top-tier investment banks for alleged unappropriated sale of FX derivatives based on their inherent risk and return profile, and dispute of closeout amounts of the derivatives instruments sold to the Company. SEDA team assessed and analyzed several exotic derivatives including their attributes, payout diagrams, and upside and downside potential in terms of gains/losses for both sides of the swap transactions.