Companies That Withhold Bad News Face New Rules Penned by SCOTUS

Companies, attorneys, and courts are expected to receive useful guidance on liability for failing to disclose troublesome trends from even a limited ruling by the US Supreme Court after oral argument on the theme this week, attorneys said.

Such a ruling “would give direction” to the lower courts in the context of a circuit split on the securities fraud issue, said Laura Posner of Cohen Milstein Sellers & Toll PLLC in New York. The split has led companies like Nvidia Corp. and Morgan Stanley to follow conflicting federal appeals court rulings.

Several justices at Tuesday’s high court argument focused on ...