Recent developments in the U.S. courts have reshaped the prospects for investor fraud suits. The U.S. Court of Appeals for the Second Circuit amplified standards last week on the issue of when investors can sue companies for securities fraud regarding statements about clinical product studies, as observed by securities litigation attorneys.
This shift in standards emerged from a ruling in which a three-judge panel on December 26 affirmed the dismissal of a securities fraud lawsuit lodged against Philip Morris International. Specifically, the case centered on the tobacco giant’s public statements characterizing its studies into the health advantages of one of its e-cigarette products as “rigorous” and representing “the best science”. This judgment has set a significant precedent in terms of the legal boundary between fact and opinion in investor fraud cases.
In light of these developments, legal professionals working with corporations and law firms should pay attention to the increasing difficulty investors might face when pursuing legal redress in cases of perceived securities fraud related to product research claims.
For an in-depth analysis of the recent Second Circuit decision and its potential implications on investor fraud lawsuits, you can read the full discussion on National Law Journal.