Not a Lexis Advance subscriber? Try it out for free.

Omnicare, Inc. v. Laborers Dist. Council Constr. Indus. Pension Fund

Supreme Court of the United States

November 3, 2014, Argued; March 24, 2015, Decided

No. 13-435

Opinion

 [*178]   [**1323]  JUSTICE Kagan delivered the opinion of the Court.

Before a company may sell securities in interstate commerce, it must file a registration statement with the Securities and Exchange Commission (SEC). If that document either “contain[s] an untrue statement of a material fact” or “omit[s] to state a material fact . . . necessary to make the statements therein not misleading,” a purchaser of the stock may sue for damages. 15 U.S.C. §77k(a). This case requires us to decide how each of those phrases applies to statements of opinion.

The Securities Act of 1933, 48 Stat. 74, 15 U.S.C. §77a et seq., protects investors by ensuring that companies issuing securities (known as “issuers”) make a “full and fair disclosure of information” relevant to a public offering. Pinter v. Dahl, 486 U.S. 622, 646, 108 S. Ct. 2063, 100 L. Ed. 2d 658 (1988). The linchpin of the Act is its registration requirement. With limited exceptions not relevant here, an issuer may offer securities to the public only after filing a registration statement. See §§77d, 77e. That statement must contain specified information about both the company itself and the security for sale. See §§77g, 77aa. Beyond those required disclosures, the issuer may include additional representations of either fact or opinion.

 [*179]  Section 11 of the Act promotes compliance [****7]  with these disclosure provisions by giving purchasers a right of action against an issuer or designated individuals (directors, partners, underwriters, and so forth) for material misstatements or omissions in registration statements. As relevant here, that section provides:

“In case any part of the registration statement, when such part became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, any person acquiring such security . . . [may] sue.” §77k(a).

Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.

575 U.S. 175 *; 135 S. Ct. 1318 **; 191 L. Ed. 2d 253 ***; 2015 U.S. LEXIS 2120 ****; 83 U.S.L.W. 4187; 25 Fla. L. Weekly Fed. S 139

OMNICARE, INC., et al., Petitioners v. LABORERS DISTRICT COUNCIL CONSTRUCTION INDUSTRY PENSION FUND et al.

Notice: The LEXIS pagination of this document is subject to change pending release of the final published version.

Prior History:  [****1] ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

Ind. State Dist. Council v. Omnicare, Inc., 719 F.3d 498, 2013 U.S. App. LEXIS 10385 (6th Cir. Ky., 2013)

Disposition: 719 F. 3d 498, vacated and remanded.

CORE TERMS

omissions, investor, misleading, issuer, registration statement, statement of opinion, expression of an opinion, compliance, Funds, material fact, misrepresentation, common law, listener, convey, untruthful statement, reasonable person, reasonable basis, disclosure, advice, manufacturers, misstatements, sentences, circumstances, hypothetical, words, lower court, incompatible, disclaimers, recipient, believes

Securities Law, Registration of Securities, False Registration Statements, Elements of Proof, Business & Corporate Compliance, Initial Offerings of Securities, Required Contents of Registration Statements, General Overview, Constitutional Law, Separation of Powers, Governments, Courts, Authority to Adjudicate, Federal Government, US Congress