Supreme Court to Issue Far Reaching Ruling on Opinions under Section 11 of the Securities Act of 1933

July 22, 2014

In Omnicare, Inc. v. Laborers District Counsel Construction Industry Pension Fund, 13-435, the United States Supreme Court will address an important circuit split under the Securities Act of 1933 (the “Securities Act”). Specifically, the Court will address whether a plaintiff bringing a claim under Section 11 of the Securities Act based upon a defendant’s statement of belief or opinion must plead and prove that the statement was disbelieved when made—so-called, “subjective falsity”—or whether objective falsity alone is sufficient. Under an objective falsity standard, liability could be predicated on the mere fact that an opinion turned out to be mistaken, even if the speaker genuinely held the stated belief. Accordingly, the Court’s holding will have broad implications and is particularly likely to affect—and potentially curtail—the dissemination of opinions, beliefs, and other “soft” information in registration statements.

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