High Court Sides With Business on SEC Liability Requirement (3)

The US Supreme Court agreed that a “pure omission” in an SEC filing can’t give rise to a securities class action without some statement shareholders can point to that’s misleading.

The court’s narrow ruling Friday by Justice Sonia Sotomayor for a unanimous court agreed that some statement was required, but it didn’t go further to say how specific it must be.

Plaintiffs must identify “affirmative assertions” before a court can consider whether “other facts are needed to make those statements ‘not misleading,’” Sotomayor said.

The case concerns Item 303 of the Security and Exchange Commission’s Regulation S-K, also known as ...