Supreme Court sides with investors

Posted on: July 19th, 2011 by Steve Larson

On March 22, 2011, the Supreme Court issued a unanimous opinion rejecting arguments by Matrixx Initiatives that, under the securities laws, adverse drug event reports must be “statistically significant” to be material to investors.  In Matrixx, shareholders had brought claims related to the company’s failure to disclose reports linking its leading product, Zicam cold remedy, to a loss of smell for some users.  The Court emphasized that such a “categorical rule would otherwise be considered significant to the trading decision of a reasonable investor.”  As a result of the Court’s decision, those claims will now be going forward.  The case number is Matrixx Initiatives, Inc. v. Siracusano, 09-1156 (U.S. Mar. 22, 2011).