Forum
U.S. Supreme Court
Case Status
Decided
Docket Number
09-1156
Term
2010 Term
Oral Argument Date
January 10, 2011
Lower Court Opinion
Questions Presented
Whether a plaintiff can state a claim under § 10(b) of the Securities Exchange Act and SEC Rule 10b-5 based on a pharmaceutical company’s nondisclosure of “adverse event” reports even though the reports are not alleged to be statistically significant.
Case Updates
Supreme Court rules on materiality of statistically insignificant adverse event reports
March 22, 2011
Held: Respondents stated a claim under §10(b) and Rule 10b–5, because respondents adequately pleaded materiality and scienter.
U.S. Chamber files amicus brief
August 27, 2010
NCLC urged the Supreme Court to reject a Ninth Circuit ruling that plaintiffs established materiality in a securities fraud case against Matrixx Initiatives. The plaintiffs claim Matrixx withheld information about medical and legal issues surrounding the alleged side effects of Zicam. The Ninth Circuit held that the district court erred when it dismissed the claims because the alleged side effects were not statistically significant. In its brief, NCLC argued that materiality had not been established because the side effects were statistically insignificant and that their disclosure would not have affected a reasonable investor’s decisions. Dismissing cases that cannot establish materiality deters meritless securities fraud claims.