Insider Trading Disclosure Update - Special Issue

18 October 2023
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In this Issue:
  • Supreme Court to Decide Whether a Private Right of Action Exists for Deficient MD&A

Key Takeaways:

  • The Supreme Court has agreed to hear an appeal brought by Macquarie Infrastructure Corporation concerning whether there is a private right of action for omissions from the disclosures required by Item 303 of Regulation S-K.
  • The Supreme Court will address whether the Second Circuit erred in holding—in conflict with the Third, Ninth, and Eleventh Circuits—that a failure to make a disclosure required by Item 303 can support a private claim under Exchange Act Section 10(b) and Rule 10b-5, even in the absence of an otherwise-misleading statement.
  • Should the Court find that Item 303 omissions can serve as the basis for Section 10(b) liability, the decision could expand private securities fraud litigation and impact issuer disclosure decisions going forward.