“Everything is securities fraud,” I like to say around here, meaning:

Occasionally I add a technical clarification: Simply not mentioning a bad thing is not fraud under US securities law. The law (Rule 10b-5) says that it’s fraud “to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.” So lying — saying something that isn’t true — is securities fraud. And many omissions are securities fraud, if the company omits information that is “necessary in order to make the statements made … not misleading.” (So for instance if a company’s public statements say “we have an ethics policy and try to be ethical,” and omit to mention “our executives did an unethical thing,” somebody will sue over that, claiming that the description of the ethics policy was misleadingly positive.)

QOSHE - Silence Is Not Securities Fraud - Matt Levine
menu_open
Columnists Actual . Favourites . Archive
We use cookies to provide some features and experiences in QOSHE

More information  .  Close
Aa Aa Aa
- A +

Silence Is Not Securities Fraud

7 0
15.04.2024

“Everything is securities fraud,” I like to say around here, meaning:

Occasionally I add a technical clarification: Simply not mentioning a bad thing is not fraud under US securities law. The law (Rule 10b-5) says........

© Bloomberg

Get it on Google Play