ealized that the Supreme Court also made significant changes to the general assumptions of the securities bar in Omnicare, Inc. v. Laborers Dist. Council Const. Indus. Pension Fund, 135 S. Ct. 1318 (2015). Before Omnicare, most members of the securities bar (and federal courts) treated the two clauses of Section 11 (and the analogous clauses in Rule 10b-5(b)) -- "one focusing on what the statement says and the other on what it leaves out" -- as part of a unitary inquiry. Omnicare, however, changed that such that each clause is usually now argued and analyzed separately. Similarly, the Supreme Court did not adopt any of the tests suggested by the parties (and applied by the federal courts) concerning the extraterritorial reach of Section 10(b) of the Securities Exchange Act. Morrison v. National Australia Bank, 130 S. Ct. 2869 (2010). Rather, the Court adopted a completely different standard.
So, maybe to state the obvious, the Supreme Court matters (a lot) when it comes to interpreting the federal securities laws. The inherent tension in the securities laws, however -- on the one hand, "meritorious private actions to enforce federal antifraud securities laws are an essential supplement to criminal prosecutions and civil enforcement actions brought, respectively, by the Department of Justice and the Securities Exchange Commission," and on the other hand, "[p]rivate securities fraud actions, however, if not adequately contained, can be employed abusively to impose substantial costs on companies and individuals whose conduct conforms to the law" -- will leave substantial power in the various courts that preside over and rule on the cases filed in their courts.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
