Supreme Court hands securities-fraud plaintiffs a rare win

From the Wall Street Journal: Securities-fraud plaintiffs don’t often get good news when their cases reach the current Supreme Court, but this week the court, in a 9-0 decision, ”reaffirmed one of its earlier rulings that the duty to disclose hinges instead on whether a reasonable investor would regard an omitted fact as a significant part of the ‘total mix’ of information that affects a decision on whether to trade stock.” The case involved a company called Matrixx Initiatives Inc., the maker of  Zicam nasal spra. Matrixx had received a number of reports that the spray caused a loss of smell, but didn’t disclose them because it concluded that the total wasn’t statistically significant. The company’s shares plunged nearly 70 percent in 2009 after the Food and Drug Administration issued a warning about the product, citing the reported health problems.

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