In a recent ruling, the U.S. Supreme Court has stepped back from delving into what constitutes a corporate “half-truth”, leaving the lower courts to grapple with this delicate issue. This decision comes in the context of a case regarding whether a company’s silence can form the basis of a securities fraud suit. The Supreme Court, interestingly, did not delve into the nitty-gritty of pinpointing what can be regarded as a “half-truth”.
Consequently, this leaves to the lower courts the task to define which corporate statements are sufficiently ambiguous as to uphold a shareholder class action. Essentially, these verdicts might end up crafting the parameters of ‘half-truths’ in a corporate context.
Please find more deliberation on the issue in
this article.