In a recent decision, the Ninth Circuit addressed for a second time the question of whether an issuer’s disclosure of a Securities and Exchange Commission investigation can provide a sufficient basis for a plaintiff to plead “loss causation” in a securities class action.
The court’s ruling – that disclosure of an investigation combined with “a subsequent revelation” can suffice to plead loss causation in a later civil action alleging securities fraud – should lead issuers to think more carefully about disclosure of such investigations at all.
via An SEC investigation: to disclose, or not disclose? | Insights | DLA Piper
