Case Detail

Matrixx Initiatives, Inc. v. Siracusano
On March 22, 2011, the U.S. Supreme Court permitted a securities fraud lawsuit to go forward against a drug company based on its failure to disclose to investors alleged safety concerns regarding one of its drugs. The decision was a setback WLF, which filed a brief arguing that the suit should be dismissed for failure to state a claim. The Court rejected WLF’s argument that absent a “statistically significant” link between the drug and an adverse condition, a manufacturer has no obligation to disclose reports involving a handful of complaints from users of the drug. The Court said that a securities fraud complaint adequately alleges a “material” omission if a reasonable investor would view the omitted information as significantly altering his view of the firm’s finances. The Court held that failure to reveal adverse event reports may sometimes meet that standard, even when (as here) the company has no reason to believe that the reports rise to the level of statistical significance.
Case Status:
Oral argument held Jan. 10, 2011. Awaiting decision.
More Information and Downloads:
8/27/2010: Download the Brief

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