March 20, 2015
The 1933 Securities Act requires a company, prior to issuing securities via a public offering, to file a registration statement, and § 11 of the Act makes statement issuers liable, via a private right of action, if, inter alia, that statement ‘‘contain[s] an untrue statement of a material fact’’ or ‘‘omit[s] to state a material fact . . . necessary to make the statements therein not misleading.’’ 15 U.S.C. § 77k(a). Section 11 has no scienter requirement, thus the statute makes no mention of an issuer’s intent to mislead.
On Oct. 4, 2013, after the U.S. Court of Appeals for the Sixth Circuit denied its motion to dismiss the plaintiffs’ Securities Act claims (12 CARE 675, 6/20/14), Omnicare Inc. filed a petition for certiorari with the Supreme Court, presenting the following question: ‘‘For purposes of a Section 11 claim, may a plaintiff plead that a statement of opinion was ‘untrue’ merely by alleging that the opinion itself was objectively wrong, as the Sixth Circuit has concluded, or must the plaintiff also allege that the statement was subjectively false— requiring allegations that the speaker’s actual opinion was different from the one expressed—as the Second, Third, and Ninth Circuits have held?’’ The Supreme Court granted certiorari March 3, 2014 (12 CARE 1451, 11/7/14) and issued a March 24 opinion by Justice Elena Kagan that delineated the circumstances in which liability can attach to a statement of opinion in a registration statement.
Read Omnicare: Negligence is the New Strict Liability When Pleading Omissions Under the Securities Act