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Supreme Court Guidance on Opinions in Registration Statements

Faced with the new test enunciated by the U.S. Supreme Court this year in Omnicare v. Laborers District Council Construction Industry Pension Fund, corporate securities lawyers will have to make extremely difficult and subjective decisions when it comes to advising their clients whether to disclose opinions in registration statements and, if so, whether the opinions might be considered materially misleading if not accompanied by disclosure of facts that might contradict the opinion.

The case arose out of a registration statement Omnicare filed in connection with its 2005 stock offering. Two sentences expressed the company’s opinion concerning its compliance with the law:

  • “We believe our contract arrangements with other health care providers, our pharmaceutical suppliers and our pharmacy practice are in compliance with applicable federal and state laws.”

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