Opinion ID: 2565
Heading Depth: 3
Heading Rank: 4

Heading: Finding of Market Inefficiency

Text: After analyzing the Cammer factors, the district court concluded that three of themthe absence of market makers for the Certificates, the lack of analysts following the Certificates, and the absence of proof that unanticipated, material information caused changes in the Certificates' pricesas well as the infrequency of trades in the Certificates all tend to establish the inefficiency of the Certificate market and prevent Teamsters from relying on the fraud-on-the-market presumption. Id. Teamsters challenges this conclusion on the ground that the district court ignored fundamental differences in the way stocks and bonds are traded. We are mindful of one court's observation that a comparison between equity and bond markets is a comparison between the proverbial apple and orange and that denying [the] application of fraud on the market to the bond market because it does not operate in the same way as a national exchange or trade in the same volume, frequency, or manner as equity on those exchanges is throwing out oranges because they are not apples. In re Enron, 529 F.Supp.2d. at 755, 768. We conclude, however, that the district court properly used the Cammer factors as an analytical tool, Unger v. Amedisys Inc., 401 F.3d 316, 325 (5th Cir.2005), and made no clear error in determining that Teamsters failed to show by a preponderance of the evidence that the Certificates traded in an efficient market. In view of this conclusion, we do not have occasion to address the nettlesome question of whether, for the purposes of determining the applicability of the fraud-on-the-market doctrine, an adjusted set of Cammer factors or even a different analytical approach altogether is better suited to analyze market efficiency in securities cases arising from the sale of debt instruments.