After the Supreme Court’s Macquarie Decision, are Public Companies Off the Hook for their MD&A Trends Disclosures?
On April 12, 2024, the Supreme Court unanimously held in Macquarie Infrastructure Corporation v. Moab Partners that the pure omission of certain public disclosures required by the SEC’s rules cannot form the basis of a private action under Rule 10b-5 under the Securities Exchange Act of 1934 (see also our SCOTUS Term in Review alert here). The decision puts to rest, for now, a series of claims attempting to hold public companies liable for the failure to describe in their Management’s Discussion and Analysis of Financial Condition and Results of Operations certain “known trends or uncertainties that have had or that are reasonably likely to have a material favorable or unfavorable impact on net sales or revenues or income from continuing operations” as required by Item 303 of Regulation S-K.
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