Yan Cao

Yan Cao specializes in matters involving financial markets, financial institutions, and financial accounting. Dr. Cao has more than eighteen years of consulting experience on securities, valuation, trading, financial institutions, financial market, and financial accounting issues.

In particular, Dr. Cao has assessed pricing and trading issues related to equity, fixed income, commodities, futures and derivatives, foreign exchange (FX), and crypto assets. She has also consulted on matters involving company valuation, solvency, risk management, corporate governance, financial reporting and internal controls, 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. She also works with experts in all stages of arbitration and litigation, including trial.

In 2023, Consulting Magazine named Dr. Cao to its list of Women Leaders in Consulting, recognizing her as a Future Leader who demonstrates “above-the-call” leadership benefiting her organization and current and future peers.

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), the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Financial Industry Regulatory Authority (FINRA), the Financial Crimes Enforcement Network (FinCEN), the Office of Foreign Assets Control (OFAC), the Federal Reserve Bank of New York (FRBNY), the New York State Department of Financial Services (DFS), the U.K. Financial Conduct Authority (FCA), Germany’s Federal Financial Supervisory Authority (BaFin), and the Australian Securities and Investments Commission (ASIC).

In particular, Dr. Cao heads Cornerstone Research’s market manipulation and market microstructure practice. In the context of regulatory enforcement actions and white collar litigation, she has experience in evaluating alleged market manipulation and trading conduct claims, payment for order-flow arrangements, price impact, and trading and hedging strategies across a range of financial markets, including crypto markets. Her expertise includes:

• Spoofing in U.S. Treasury cash and futures, precious metals, domestic and cross-listed equities, commodity and financial futures, and FX markets
• Front-running and pre-hedging practices in interest rate swaps and FX markets
• Trading and market manipulation in crypto centralized exchanges and decentralized platforms on blockchains
• Price manipulation in the agricultural commodity futures markets
• Trading and hedging in Volatility Index (VIX) related products and options markets
• Benchmark manipulation in interest rate, precious metals, and energy products (e.g., Platts)
• Spread and price manipulation in Treasury and agency bond markets
• Barrier options, algorithmic trading, “Last Look” practices, and spread manipulation in FX markets
• Banging the close and coordinated trading in post-IPO equity markets

Securities class action litigation

Dr. Cao has worked on multiple 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 (OTC) securities
• Evaluating damages and settlement estimates, as well as mediation strategies

Valuation and M&A

In the context of M&A and corporate transaction disputes, Dr. Cao has:

• Analyzed company and transaction valuations using discounted cash flows (DCFs), comparable companies/transactions, and other valuation methodologies
• Addressed issues related to deal process, corporate governance, and hedge fund activism
• Analyzed damages claims for matters involving alleged breach of contract and shareholder consent right violations

Bankruptcy and restructuring

Dr. Cao consults on valuation, credit risk, solvency, and reasonable equivalent value in matters with fraudulent transfer and fraudulent conveyance claims. She also has experience:

• Assessing deepening insolvency claims and damages related to an oil and gas company failure
• Analyzing margined products and derivatives positions in early termination and close-out process pursuant to ISDA agreements
• Evaluating swap termination and CFTC regulation-related issues in connection with the bankruptcy of prominent broker-dealers/FCMs
• Analyzing loan market efficiency and interest rate issues in a restructuring dispute
• Formulating business forecasts in the context of a restructuring plan of an energy company

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. Her work includes:

• Analyzing asset and goodwill impairment, revenue recognition, contingencies, variable interest entities (VIEs), and other financial accounting issues for public companies
• Evaluating financial accounting issues related to securitization, financial instruments, and derivatives
• Assessing the value relevance and price impact of financial disclosures
• Consulting on tax-related matters, notably executive compensation and the economic substance of transactions

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.