At the Thomson Reuters On the Case blog, Alison Frankel writes:
It’s been just about a year since the U.S. Supreme Court said in Omnicare v. Laborers District Council Construction Industry that securities issuers can be liable to investors even if their misstatements are couched as opinions. But in a ruling [in March] in In re Sanofi, the 2nd U.S. Circuit Court of Appeals held that despite Omnicare, issuers don’t have to tell investors about important information that may contradict the opinions they are expressing.
If the Supreme Court opened the door in Omnicare to class actions based on issuers’ dubious opinions, the 2nd Circuit – the busiest appellate court for securities class actions – mostly closed it again in the Sanofi decision. “The circuit has clearly stated that things aren’t going to change much under Omnicare,” said Robert Fumerton of Skadden Arps Slate Meagher & Flom, who was not directly involved in the case. (Weil Gotshal & Manges won it for Sanofi.) “It’s going to be very difficult for plaintiffs in this circuit to establish liability,” Fumerton said.
The full column is available here.