may please the court i'm joseph daly on behalf of the lead plaintiff appellant and the certified class on reserving two minutes for rebuttal because there's a lot to digest in the summary judgment appeal your honour's i'd like to briefly touch upon three main areas first barclays affirmative misstatement in its form twenty f that it held thirty seven point eight billion pounds in credit market positions when in reality it held sixty billion pounds in credit market positions second the offering materials failure to disclose the specific measurable decline in barclays capital ratios over just the last three months which overstated its capital position while understating barclays need for more capital in a deteriorating capital market and third the defendant's wholesale failure to meet what is their heavy burden of proving that any series five stock price declines after the offering were unrelated to their misrepresentations now turning to the first issue on page fifty three of the twenty f barclays voluntarily told series five purchasers that it had thirty seven point eight billion pounds in credit market positions which was a key metric at a time of great financial turmoil this court said as much in the first opinion it has said that again in the norm or opinion that the context of the market matters and it matter greatly to our clients who were going to part with two point five billion dollars of their monies it omitted twenty two billion dollars in other risky credit market assets in the us barclays understated its total exposure to those credit market assets by forty percent and i would ask the court if it so inclined to turn to the record clerks docket two forty three at paragraph two forty four the real numbers of the missing twenty two billion pounds in credit market exposures now having addressed the subject and what exactly you are referring to in it is that in the material before us in the index it's it's not in the joint appendix but it's certainly in the supplemental appendix so it where you're directing us to a clerk which of the seventeen volumes that's right i believe clerks stock it to forty three i want to say that's a rule fifty six point one statement plaintiff fifty six point yes  and it was this court has a long storied history of recognizing that when you address the subject of something material you are required to address it fully and completely having addressed the subject of credit market positions under the securities laws of the ng on just a second i really want to know what you're talking what document you're talking about document two forty three plaintiff's response to barclays defendants local rule fifty six point one statement so that f numbers page eighty six of one sixty one the number at the bottom is it's page eighty three of our submission but it is specifically paragraph two forty four and you will see there the missing twenty two billion dollars in credit market assets ok as i was saying having addressed that very key subject very material subject they barclays was under a duty to fully disclose it and they didn't in fact they went beyond that on page fifty three of that form twenty f they specifically pointed to a b s c d o asset backed securities collateralized debt obligations they said we have on our books six point one billion pounds of these but don't worry investors none of them are wrapped by monna line insurance because everybody knew at the time that the model line insurers were under a lot of pressure they had hundreds of billions of exposure what what barclays did not tell the investors was that it had another six billion pounds in the very same asset class a b s c d o and again that's at paragraph two forty four that i was just speaking to your honor about the district court say that  the reference was none of the above are wrapped by monna line and that's trent read in context it was very clear that that wasn't the full statement well two points the keyword for the first point the key word there is above so they're specifically pointing investors to those a b s c d o as above but what there while that may be literally true and again this court recognizes the literal literal truth can still be misleading while that may have been literally true at the same time it omitted material six point one one eight billion and other credit market assets that were wrapped by model line insurers and that certainly would have mattered to our clients i want to just jump very briefly to the fact that the the defendant's where he decided unilaterally that he was going to use the characteristic the criterion of statistical state significance in order to not look at one hundred seven of one hundred fourteen days of abnormal price return as a district you know it accepted the defendant's expert on last causation yes and held that the defendants had shown that there was nothing suggesting a relationship between the price declines after corrective disclosures reflecting the price decline and so that and i and my question to you is what do you point to in specific to show that there was a resulting loss because i read your argument is basically they haven't shown that they haven't shown that we don't like the defendant and that the expert you know he is the fact that there was just a decline momentarily that was then recouped that the defendant expert says was physically not as distinctly not significant doesn't mean that it wasn't actually caused and therefore it still is sufficient but i still didn't hear a robust rebuttal saying here's the last that we trace to these over statements thank you judge carney a couple points in response and i don't mean to be flippant here and i don't mean to sound aggressive but that is not our burn the burden is on the defendants to point to the absolute but what i'm trying to telegraph to you is that i'm not sure you have raised a significant enough response to what they have offered to suggest that they haven't carried their i'll give you i'll give you an example they point to an august seventh disclosure that they there is that why is that wrong not as a matter of law because they were a series of disclosures our expert doctor chad kauffman pointed out a series of disclosures in august october that cetera for example when when you say  that the notional is were completely did disclosed that's in the defendant's form six case that said nothing about the twenty two billion dollars in credit market assets that were there was not disclosed back in  any basis for discounting defendants offerings on causation based on what happened in the market after corrective disclosures were made i want to point just  to two or three dates again the aug seventh disclosure which they say completely disclose any problem with the model and i have already made the point that it didn't say the word about the twenty two billion pounds in credit market positions  fourteenth the series five shares declined one point seven two percent after analyst revealed that barclays might need to record additional billions of pounds in credit market write downs expert dr klein for them ignores that because he says it's not statistically significant he doesn't say that it doesn't address the subject of credit market positions he just says it's not statistically significant therefore i don't have to look at it this court has said in the ackerman case and that the onus is on the defendants to prove this congress deliberately defended let me ask you still about the prices i mean after they decide to thousand and eight disclosure so the price fell from what i might note show fell twenty three cents from twenty four sixty nine to twenty four forty six and then one week later the price went up to twenty four thirty one and then two weeks later twenty four sixty the share price then exceeding the pre disclosure price several of those days this still isn't you know striking me as suggesting that a loss was was caused by the omissions and people's reliance on admissions that you have said were material so  me why i am wrong you're on first of all reliance is not an element of our thirty three i claim but at the time that the complaint with the series five allegations was filed the price of the series five  shares had already dropped to twelve twelve dollars and change half the price of the offering price i would point you all way up until october two thousand and eight when the those shares dropped six point seven four percent on october of two thousand and eight was significantly different setting than august when the corrective disclosures were made and it's our law and practice is to look at the effect on the market when the corrective disclosures are made i understand that you have important work because ation issue i understand that but it's all of the court's position which is again mentioned in the case that whatever is going on in the market at the time it is the defendant's bergan burden to desegregate those effects and they did not if they went so far nose the way they actually pronounce it in italy but for some reason my family pronounces it to mean also very good well thank you may it please the court i think it maybe i'll just pick up where mr daley left the court's permission a couple of points let me just push back a little bit i spent a lot of time with mr kaufman's rebuttal report and i thought it was interesting i'm not saying i agree with it because econometrics is not my thing but there are at least some discussions about some sort of foundational fundamental flaws in the methodology of the possibility that some of the things that are looked at as expected losses were in fact caused by some of the very same conduct that is alleged in the complaint here and so i guess my point with that one of the principal criticisms that mr kaufman had of dr klein and mr daly just alluded to it was that by using statistical significance thresholds dr klein didn't end up looking at a bunch of other days where the standard methodology in his advanced study and what mr kaufman did was to sort of nit pick around the edges of some of his methodology mr kaufman did not do his own event study which is unusual even in a case where it's the defendant's burden he did not analyze the causes of any price changes he did not opine that the three corrective disclosures that dr clyde and identified were not in fact correct if he did not opine that any of dr klein's conclusions on lack of statistical significance were wrong and he did not identify to judge carney's point any other disclosures that he opined were corrective that is to say revealed some then undisclosed omission omitted information or previously misstated information that needed to  disclosed at the time of this offering now in the arkansas teachers case against goldman sachs this court recently observed that statistically insignificant price movements are indistinguishable from random fluctuations in the market so although dr mr kaufman excuse me pointed out a number of other days where the stock price moved around he did not identify a single statistically significant price movement on any of those days and that's very important here because in the petrobras case was mentioned in the no more a case was mentioned it's important we we grant mr daly that it was our burden and it was important for us to come forward with the showing that desegregated the post august price declines are disentangled the post august price declines from any allegedly misstated omitted information that was required to be disclosed at the time of the offering the event study of the kind that dr klein used provides precisely that disentanglement and in no mora the defendant's expert did not that are standard operating procedures according to this court in the vendee but the actual prices themselves leave dr clyde an aside the actual price activities themselves refute causation i may fifteenth the first correction the price went up on july to june excuse me june two thousand and five of two thousand and eight where the additional capital raise was announced the price went up on aug seventh two thousand and eight when a lot of things were disclosed this was not just a press release that said oh by the way the so called notional amount of our modern life insurance is x and the price went down by a statistically insignificant twenty three cents but leave that aside as an absolute number it went down by less than one percent but that disclosure on august seventh also announced another one billion pounds in net losses due to credit market deterioration that indisputably had occurred between the time of this offering and august as carney you're quite right that the world in october was totally different than it was in april everybody knew what was going on in april it was a time of serious market to slow patient but things got worse in september lehman fail in september october adji had to be bailed out with a ton of things that happened during this time period that no one is claiming could have been or should have been disclosed back in april of two thousand and eight in the post august eight  excuse me the post august seventh two thousand and eight price declines that the plaintiffs are seeking to recover followed all kinds of now famous or infamous financial crisis events that that no one claims could have been disclosed by that the march price the class period low price of four dollars and ninety five cents that cited in the complaint here was the i think it was the twelve year low for the dow jones industrial average so  those are the reasons why dr kaufmann did not provide an adequate rebuttal to dr prodding he simply provided speculation he identified some other news articles he said dr  considered them but he doesn't say why because all of those price movements he's pointing to were statistically insignificant except for one which was october thirteenth two thousand and eight where announced a second capital raise after the first capital raise post this offering at issue in this case was announced on june twenty five and as i mentioned the price went up the next capital raise after that was announced  october thirteenth and that was gave rise to another to a statistically significant price movement which dr clyde looked at and it was an increase of over fifty percent why is that because these shares are preference shares they sit between common equity and debt securities in the capital structure so raising more equity capital is good news for the shares because it means there's a bigger equity cushion to pay dividends and in this court recognize and lit that case different securities holders have different economic interests and so the statistically significant price change post has to seventh two thousand and eight the only one cause a fifty two percent increase in the price of the stock i'd like to move quickly if if i might your honor just to the alleged two omissions that remain in the case because i see i have two minutes and i think it's important now the last causation takes care of all of that one could assume one could assume action ability of those omissions and just affirm judge crotty on the ground of negative causation but i think it's important and with the court's permission i'll just address it briefly both of the alleged omissions are clearly in actionable and judge crotty went through an incredibly methodical analysis as to why like any omissions case first the question is was there a duty to disclose a duty to disclose could be found in a regulatory provision a statutory provision an accounting provision or a duty to disclose amid information can arise from the need to disclose additional information in order to render something else that was said not misleading judge crowley went through each of those steps he determined there was no duty on the on the notional amount of mana line insurance applying this court's decision in r b s he took a position at the court that in r b s we were instructing that barclays had no duty as a matter of law to disclose the notional amount of its model line insured assets is that how you read r b s not quite your honor and i and i'm not sure well let me put it this way in r b s was a motion to dismiss i actually listened to the argument on friday because mr daly argue the case it's the same exact arguments they're making here and judge crotty i think what he was saying and i'm very familiar with the sentence you just referred to your honor i think what judge crotty was saying was that in r b s the conclusion was they looked at at the allegations the put the complaint the court assumed as as it had to on a motion to dismiss that they were true and accepting those allegations it is true the pleading in r b s didn't give any reason why an exposure to model line insurers needed to have been disclosed instead as an exposure to the underlying assets here similarly where there are no disputed issues of fact this point we know what the notional amount was we know what the exposure you're to model lines was that was the one point three three five billion that was disclosed and so i think what judge crowley was saying that this court instructed in r b s that in a situation like that which is the same here for all intents and purposes there was no duty to disclose and the reason there was no duty to disclose is that and i think it's a stronger case here than in u b s r b s excuse me because b disclosure said what the one point three three five represented it said this is our exposure to model winds it explained what that meant it said the value of exposure to model line insurers under these contracts was one point three three five went further and i didn't see this in r b s i didn't handle that case so i'm not sure about all the details of it but i didn't see an argument made in r b s like this one where barclays disclosure went on to say that the amounts do not indicate barclays exposure to credit or price risks and so that we have a case here your honor where barclays explained to investors what it was disclosing the exposure to  lines that's really the value of the insurance as of that point in time on a mark to market basis that was all explained but went further and also disclosed what we're not disclosing everyone knew that there was  amounts or that there were underlying assets beneath these insured positions in fact there was an earnings call that's in the record and it's this page references your honour's r c o s a which is the way they prefix the supplemental appendix e o s a four five seven two and c o s a four five eight four this is the february nineteenth oh eight call with investors the public call announcing the results for the year ended twelve thirty one zero seven and in that call it was also explained that the one point three three five billion i'm on a line exposure is the mark to market value of the model line insurance as of that twelve thirty one zero seven date a question was asked which was because in the prior reporting period the exposure to model lines was only one hundred forty million now it's up to one point three three five billion in a question from a securities analyst was asked during that call does that increase represent even more mana line insurance positions or does it just represent the teary aeration in the underline in the answer was that it represents the mark to market decline in the underlying assets and not a whole lot of new positions in fact there were no new positions as as the plaintiff's expert admitted at deposition so everybody knew what they didn't know if i could notional amount in this context is quote not a real meaningful number close quote that's c l s a for eight for four in this context and the reason for that is exactly the argument that was made in r b s the notional amount of underlying insured assets that really just means the face value the par value is not the exposure to the underlying assets and it's not the exposure to the model on insurance and the investors were told that it was neither of that that battle of the experts was not going to go before the jury the judge said that the plaintiffs were complaining about perhaps the weight to be attributed to professor klein's analysis that's a that's a textbook example of a question that goes in front of a jury not in front of a judge as a matter of law second point is a lot of talk over the last ten minutes about the deteriorating market we all know the market was deteriorating but let's not forget two points number one barclays was telling everybody back at the time of this offering which is a very key snapshot in this whole story they were telling everybody they're above the fray their peers were writing down like u b s nineteen billion dollars in sub prime assets barclay wasn't doing that barclays shares in fact went to soaring that's the quote from analysts when soaring in in march because they seem to be doing so well compared to their peers now this court in the new murray case talked about a deteriorating market and this dovetails with our point about it's not our burden it's their burden to disentangle the effects this court and numerous said the crucial point that dooms the defendant's loss causation defense is that those macro economic forces the deteriorating market and the misstatements were intimately intertwined that is the precisely what was happening here the very same financial shenanigans that barclays was doing in its form twenty f were what the at the time of this deteriorating market what mattered because the market was deteriorating that is why it mattered so much for honesty four months earlier in april at the time of the offering our clients did not know at the time about the twenty two billion dollars twenty sorry twenty two billion pounds which is more like forty four billion dollars in credit market assets that were not listed there our clients did not know that the united kingdom's financial services authority had come in and said we're really concerned about your capital ratios you've got a target of five point five percent you've told us we or your numbers tell us you're not going to meet that target for twenty two of the next twenty four months and  i know the defense make a point about well there was a two percent regulatory minimum but that doesn't matter barclays itself wasn't happy with the two percent regulatory minimum barclays itself set a bar of five point two five percent they knew they were going to beat it for the next twenty two months they refused to tell our clients about it and instead in the form twenty if they said our capital equity ratio is at five point one percent well as of the time of the offering that was a lie it had already deteriorated down to four point three four percent and it had done so steadily over the last three months and that steady decline is a trend under item five zero three i'm sorry three zero three that is a duty to disclose that was  violated thank you your honors very much i think we have your arguments will take the matter under advisement that concludes our oral argument calendar for today we have one matter on submission to actually consolidated u