Silence May Not Be Golden For Cos. After High Court Review
By Carmen Germaine
March 27, 2017
The high court on Monday accepted Leidos Inc.’s petition for review of a Second Circuit ruling reviving a proposed class action alleging the contractor withheld information that it was being investigated by state authorities for overbilling New York City. The appeal will resolve a split between the Second and Ninth circuits over whether a company can face liability for securities fraud claims from third parties if it doesn’t disclose “known trends and uncertainties” as required by Item 303 of the SEC’s Regulation S-K.
“I’m not surprised the Supreme Court took this case, because it’s a really important issue that does have potentially enormous consequences,” said Ron Colombo, a professor at Hofstra University’s Maurice A. Deane School of Law.
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