S. Ct.: Supreme Court decision in Macquarie clarifies ‘pure omissions’ in securities fraud - 17 April 2024

A new Supreme Court decision could make it harder for private plaintiffs to bring securities fraud actions.

In its April 12 decision in Macquarie Infrastructure Corp. v. Moab Partners, L.P., the Supreme Court clarified that private securities fraud actions may not use “pure omissions” as the basis for certain securities fraud claims without a misleading statement.

The decision narrows potential liability for private securities fraud claims under Exchange Act Rule 10b-5(b) or Item 303 of Regulation S-K.

While consumer advocates argued that limiting claims in this way will keep important information from investors, business groups said that allowing “pure omissions” claims would flood the courts with meritless litigation second-guessing management decisions.

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