Results show that the choice of purchase-sale matching methodology (such as “last in first out” or “LIFO” and “first in first out” or “FIFO”) is moot when an investor’s gains due to the fraud are required to offset his or her losses due to the fraud. Specifically, the analysis shows that when offsets are incorporated, LIFO, FIFO, and in fact all purchase-sale matching methodologies will yield identical total damages estimates.
Thus, as a practical matter, it is sensible for the litigants to focus on the offset decision before considering the purchase-sale methodology. If offsets are required, then the parties do not need to allocate litigation resources to dispute the purchase-sale matching methodology. Conversely, if offsets are not required, then the purchase-sale matching method may have a considerable impact on damages, and the purchase-sale matching issue should be accorded the concomitant litigation resources.