Can Silence Keep You Safe? New Debate On 10b-5 Liability

Law360, New York (January 20, 2015, 10:57 AM EST) -- In Stratte-McClure v. Morgan Stanley, 13-0627-cv, U.S. App. LEXIS 428 (2d Cir. Jan. 12, 2015), the Second Circuit issued a decision that confirmed that the decision to remain silent when Item 303 of Regulation S-K requires a company to speak can constitute an actionable violation of Rule 10b-5 so long as the other requirements of Rule 10b-5 are met. The Second Circuit acknowledged that its holding in Stratte-McClure constituted both an issue of first impression for the Second Circuit and set up a circuit split with the Ninth Circuit which recently held, in In re NVIDIA Corp. Securities Litigation, 768 F....

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