Fragrance Producer Beats Acquiring Company Shareholders’ Suit

International Flavors & Fragrances Inc. shareholders can’t sue Frutarom Industries Ltd., a company it acquired, for allegedly making material misstatements in violation of the Securities Exchange Act, the Second Circuit ruled.

The plaintiffs, a group of pension funds and insurance companies that bought stock in IFF, lack standing to sue Frutarom based on alleged misstatements it made about itself because they themselves never bought or sold shares of Frutarom, the US Court of Appeals for the Second Circuit said, in an opinion written by Judge Michael H. Park.

The majority rejected the plaintiffs’ argument that in the case of an ...