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Capital Markets, Professional Perspective - Silence Is Golden: No Liability for Failure to Disclose Future Trends Under Rule 10b-5(b)
In rejecting an investor's bid to hold Macquarie Infrastructure liable for failure to disclose information required by Item 303 of SEC Regulation S-K, 17 C.F.R. § 229.303(b)(2)(ii) (2022), the Supreme Court in Macquarie Infrastructure Corp. v. Moab Partners, L.P., LP, 144 S. Ct. 885, 218 L. Ed.2d 214 (Apr. 12, 2024) resolved a circuit split and confirmed “pure omissions” are not actionable. The Court in its succinct April 12, 2024, opinion declined to address wider-ranging arguments explored during oral arguments, yet provided another arrow in the quiver of defense counsel—one that may be increasingly important to companies navigating evolving ESG and climate disclosure regimes across multiple international jurisdictions. Conversely, the Court's decision foretells litigation to come as half-truths—“representations that state the truth only so far as it goes, while omitting critical qualifying information"— remain actionable.