U.S. Supreme Court Unanimously Resolves A Circuit Split: Pure Omissions Are Not Actionable Under Rule 10b–5

In Macquarie Infrastructure Corp. v. Moab Partners¹, the U.S. Supreme Court recently resolved a split among U.S. Circuit Courts of Appeal when it unanimously held that “[s]ilence absent a duty to disclose, is not misleading under Rule 10b–5”. While “half-truths” are still actionable under that provision, a pure omission is not.

What you need to know

• The Court's opinion rested on textual and statutory construction analyses. Justice Sotomayor resolved the question before the Court—"whether the failure to disclose information required by Item 303 can support a private action under Rule 10b–5(b), even if the failure does not render any ‘statements made' misleading”—by analyzing the Rule's text and broader statutory construction.