Matrixx Initiatives, Inc., et al., Petitioners v. James Siracusano et al. (563 U.S. 27)
U.S. Supreme Court · decided March 22, 2011 · Supreme Court Database (Spaeth)
- Citation
- 563 U.S. 27 · 131 S. Ct. 1309
- Decided
- March 22, 2011
- Term
- October Term 2010
- Vote
- 9–0
- Majority author
- Justice Sotomayor
- Issue area
- Economic Activity
- Disposition
- Affirmed
- Outcome
- Petitioning party lost
- Ideological direction
- Liberal
Opinion excerpt
Justice Sotomayor delivered the opinion of the Court. This case presents the question whether a plaintiff can state a claim for securities fraud under § 10(b) of the Securities Exchange Act of 1934, 48 Stat. 891, as amended, 15 U. S. C. § 78j(b), and Securities and Exchange Commission (SEC) Rule 10b-5, 17 CFR §240.10b-5 (2010), based on a pharmaceutical company’s failure to disclose reports of adverse events associated with a product if the reports do not disclose a statistically significant number of adverse events. Respondents, plaintiffs in a securities fraud class action, allege that petitioners, Matrixx Initiatives, Inc., and three of its executives (collectively Matrixx), failed to disclose reports of a possible link between Matrixx’s leading product, a cold remedy, and loss of smell, rendering statements made by Matrixx misleading. Matrixx contends that respondents’ complaint does not adequately allege that Matrixx made a material representation or omission or that it acted with scienter because the complaint does not allege that Matrixx knew of a statistically significant number of adverse events requiring disclosure. We conclude that the materiality of adverse event reports cannot be reduced to a bright-line rule. Although in many cases reasonable investors would not consider reports of adverse events to be material information, respondents have alleged facts…
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