In the first civil case to reach trial under Ireland’s Companies Act of 1990, counsel for Fyffes plc (Fyffes) retained Cornerstone Research to explore the potential effect of inside information on trades in Fyffes stock.
Retained by Arthur Cox
In the first civil case to reach trial under Ireland’s Companies Act of 1990, counsel for Fyffes plc (Fyffes) retained Cornerstone Research to explore the potential effect of inside information on trades in Fyffes stock. Fyffes alleged that a former director of the company possessed material inside information when he sold large blocks of Fyffes stock. Cornerstone Research worked with a finance professor who determined that the information possessed by the former director would have materially affected Fyffes’ stock price had it been made public when the stock was sold. We analyzed the intraday trading prices of Fyffes stock on the day when substantially similar information became public. The dramatic decline in Fyffes’ share price within minutes of the information’s release supported the expert’s conclusion.
Fyffes appealed to Ireland’s Supreme Court, which unanimously overturned the lower court’s decision.
After an unfavorable verdict in the Irish High Court, Fyffes appealed to Ireland’s Supreme Court, which unanimously overturned the lower court’s decision. The written decision reflected the importance of our expert’s analysis to the court’s finding: “[T]he fact that the 20th March 2000 Announcement materially affected the shares was relevant evidence, as was the immediate drop in the share price. This evidence is such that, taken with the findings of fact, it is an inevitable conclusion that the information was price-sensitive.” The case settled in the wake of this ruling.