Law Profs File Amicus Brief in Case Addressing Definition of Materiality

In January the Supreme Court will hear oral argument in Matrixx Initiatives Inc. v. Siracusano, a securities fraud action that addresses again the definition of materiality under Rule 10b-5.  The issue is whether the application of a test of statistical significance to adverse event reports for widely distributed drugs will result in a bright-line test for materiality that is inconsistent with the Northway/Basic test.  Recently a group of law professors, spearheaded by Jay Brown (Denver), filed an amicus curiae brief (Download Matrixx09-1156 bsac Professors at Law) in support of respondents, as did the United States (Download MatrixxAmicus_Pltfs_SG_SEC.

The Ninth Circuit's opinion, reversing the district court's dismissal of investors' claim, is reported at 585 F.3d 1167 (9th Cir. 2009).