By Doug Greene, Ivory L. Bishop, Jr., Genevieve York-Erwin, and Albert Lin, BakerHostetler. Mr. Greene is a Partner in the New York, NY and Seattle, WA offices and leads the firm’s Securities and Governance Litigation Team. Mr. Bishop is an Associate in the New York, NY office. Ms. York-Erwin is an Associate in the Seattle, WA office. Mr. Lin is Counsel in the Columbus, OH office.

Statements of opinion are ubiquitous in corporate communications. Corporations and their officers routinely share subjective judgments on issues as diverse as asset valuations, strength of current performance, risk assessments, product quality, loss reserves, and progress toward corporate goals. Many of these opinions are crucial to investors, providing them with unique information and insight. Yet, for decades, the law governing evaluation of opinions was a tangle, with inconsistent standards that didn’t allow executives to voice truthful opinions with confidence that they wouldn’t be unfairly second-guessed.

Five years ago last month, the Supreme Court’s landmark decision in Omnicare, Inc. v. Laborers Dist. Council Const. Indus. Pension Fund, 135 S. Ct. 1318 (2015), established clear standards for evaluating opinions. The Court held that a statement of opinion is only false under the federal securities laws if the speaker does not genuinely believe it, and is only misleading if it omits information that, in its full factual context, would cause the statement to mislead a reasonable investor. Omnicare improved securities law—and in our view is the most important Supreme Court securities decision since Basic v. Levinson, 485 U.S. 224 (1988)—for two reasons: