On June 18, 2018, the U.S. Supreme Court dismissed this case without decision after the parties reached a settlement. WLF had filed a brief in the U.S. Supreme Court seeking to overturn an appeals court decision that makes public companies potentially liable for securities fraud if they fail to disclose information whose disclosure Securities and Exchange Commission regulations require. Specifically at issue is whether Item 303 of SEC Regulation S-K generates a duty to disclose that creates Rule 10b-5 liability. WLF’s brief argues that the appeals court ruling would dramatically expand securities fraud liability. Under existing law, an omission in a company’s financial statement is actionable only if disclosure is necessary to prevent the company’s voluntary disclosures from being misleading. WLF argues that nothing in the federal securities statutes suggests Congress authorized securities fraud claims—let alone private rights of action by shareholders—against companies whose omissions arguably violate SEC regulations but do not render misleading anything voluntarily said by the company.
Leidos, Inc. v. Indiana Public Retirement System, et al.