US federal securities law judicial decisions last year and in the
beginning of this year saw an easing of the initial requirements for
materiality and reliance in Rule 10b-5 class certifications, alongside
new limitations on the parties who may be held liable in such actions
and a narrowing of the territorial scope of US federal statutes.
In March 2011, in Matrixx Initiatives v Siracusano, the Supreme Court rejected a bright-line test for materiality in favour of the fact-specific enquiry from Basic Inc v Levinson,
which asks whether there was "a substantial likelihood that the
disclosure of the omitted fact would have been viewed by the reasonable
investor as having significantly altered the total mix of information
made available" to the investor.
The court held that non-disclosure of data from scientific studies
could give rise to a cogent and compelling inference of deliberate
recklessness and a finding of scienter, irrespective of...