Clarifying Statistical Evidence: The Big Shortchange in the "Abacus" Case

In the “Abacus” case, on which the Oscar-winning film The Big Short was based, Goldman’s expert testified in opposition to class certification that there was “no evidence” that the disclosure of management’s misrepresentations caused Goldman’s stock price to fall. Declaration of Paul Gompers at *6, In re Goldman Sachs Group Inc. Sec. Litig., 1:10-cv-03461-PAC (S.D.N.Y. filed Apr. 6, 2015). The finder of fact may have been surprised to realize that the expert was not offering an opinion that the stock price did not fall due to the disclosure, or even that it was more likely to have not fallen than to have fallen. Instead, he was merely offering an opinion that he could not rule out the possibility that the stock price did not fall due to the disclosure.