Nick Even in Law360: Lawyers Weigh In On High Court's Omnicare Decision


On Tuesday, the Supreme Court reversed and remanded a Sixth Circuit ruling that executives can be held responsible for opinions expressed to investors that later turned out to be false. Here, attorneys tell Law360 why the decision in Omnicare Inc. et al. v. Laborers District Council Construction Industry Pension Fund et al. is significant…

“As to whether a ‘believed’ opinion may be an actionable misstatement under Section 11 when incorrect, the court’s ruling was unavoidable. Some commentators opined the court would affirm the Sixth Circuit. Were they misrepresenting something then, simply because they are wrong now? Of course not, unless they secretly thought the contrary. As for omissions and opinions under Section 11, because Omnicare’s inquiry involves the speaker’s ‘basis,’ the ‘foundation’ a reasonable investor ‘would expect an issuer to have,’ and ‘reading the statement fairly and in context,’ there will be considerable room for future disagreement. But the confirmation that alleged omissions must be both specific and material is helpful to issuers.”

Excerpted from Law360. To read the full article, click here (subscription required).

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