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Writer's picturePaul Peter Nicolai

Supreme Court Limits Shareholder Suits

Updated: Jul 30

The U.S. Supreme Court unanimously ruled that a corporation's failure to disclose certain information about its future business risks, without more, cannot be the basis of a private securities fraud claim under Federal law.

 

WHY THIS IS IMPORTANT… this decision resolves a split in the federal courts around the country by holding that unless a failure to disclose made something that was disclosed misleading, a failure to disclose is not enough to sustain a federal securities lawsuit.

 

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