SCOTUS tackles when a statement of opinion is actionable under the 1933 Act

The Omnicare case merits watching as it is briefed and argued during the next Supreme Court term

Building on its recent trend of granting certiorari in securities cases at an arguably unprecedented rate, the Supreme Court has granted certiorari in a case that is likely to impact the future direction of federal securities litigation involving companies that issue securities pursuant to a registration statement filed with the SEC. The case will impact corporate officers, directors, underwriters and auditors involved in such filings as well. At issue is whether or not a plaintiff may survive a motion to dismiss by alleging that a statement of opinion contained in a registration statement was “objectively false” — that is, merely inaccurate — or whether the plaintiff must go further and allege facts showing that the opinion was “subjectively false” — meaning that the defendant did believe the statement at the time it was made.

In Indiana State District Council of Laborers v. Omnicare, the 6th Circuit held that the strict liability provisions of Section 11 of the 1933 Act apply with equal force to statements that traditionally constituted “soft” information, such as statements of opinion.

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Joe Crace

Joe Crace leads the Securities and Shareholder Litigation Group at Bass, Berry & Sims PLC. (Nashville, Tenn.). Crace may be reached at (615) 742-7896 or by...

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Brant Phillips

Brant Phillips is a member of Bass, Berry & Sims PLC (Nashville, Tenn.). Phillips co-leads the Securities and Shareholder Litigation Group. He may be reached at...

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