Full Disclosure: Share Price Is Not Enough

If disclosure of information has no effect on a company's share price, was that information really material to investors? A recent Ontario Divisional Court ruling suggests that the answer may be "Yes" if the information is of the kind that a reasonable investor would want to rely on in making an investment decision. In Cornish, the Court considers the test for when a "material change" has occurred and concludes that the market impact test for materiality can be satisfied even if the share price is not impacted following disclosure of the information. The case is an important one about what constitutes "materiality"; when external events may trigger disclosure obligations; and the breadth of the "public interest" power of the Ontario Securities Commission (OSC).