Plain-English summary
Dismisses review in Facebook v. Amalgamated Bank — case removed after Court had agreed to hear it
The Supreme Court dismissed as improvidently granted (DIG) its review of Facebook, Inc. v. Amalgamated Bank, a securities disclosure case about whether failure to say a past risk occurred can be misleading and what pleading standard applies for loss causation. The case was argued and then the Court issued a per curiam order dismissing certiorari.
Why this matters
The questions raised could have changed how companies draft risk disclosures and how easy or hard it is for investors to plead securities-fraud claims about loss causation. Because the Court dismissed review, there is no new nationwide rule from the Supreme Court, leaving appellate court precedents (including the Ninth Circuit’s decision) in place for now.
Who may feel it
- Publicly traded companies and their legal teams
- Investors and class-action plaintiffs
- Securities lawyers and courts handling fraud suits
- Financial markets and regulators
Key questions
- Are risk disclosures false or misleading if they fail to say a risk already happened in the past when that past event creates no known ongoing or future harm?
- Which pleading standard governs loss causation in private securities-fraud suits: the ordinary notice-pleading Rule 8, or the heightened particularity requirement of Rule 9(b)?