Continuing its trend of issuing important decisions that define the scope of private actions under the securities laws, the U.S. Supreme Court recently issued its decision in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, which addressed how statements of opinion and belief are treated for purposes of securities claims under Section 11 of the Securities Act of 1933. (Section 11 covers misstatements made in SEC registration statements in connection with the public offering of stock.) How statements of opinion and belief are treated in Section 11 cases is critical because a plaintiff suing under that provision need not allege and prove scienter (that is, intent to deceive), reliance on an alleged misstatement, or loss causation, all of which are necessary in a more traditional claim under Section 10(b) of the ‘34 Act.
Read more
Location