In Matrixx Initiatives V

In Matrixx Initiatives v.Siracusano,the U.S.Supreme Court analyzed the question of whether an issuer must disclose known information about possible side effects of a drug that could affect the drug's stock price even though no proven statistical link exists between use of the drug and the adverse effect.The Court held:

A) a fact finder could determine the company's statements to be material to a reasonable investor and therefore had a duty to update them as soon as they became unreliable.
B) a person who trades while in possession of inside information violates Rule 10b-5 only if he or she decided to trade based on that information.
C) a requirement of such a representation in the agreement did not exclude a finding of reasonable reliance on the misrepresentation.
D) a plaintiff must prove that the defendant acted with "deliberate recklessness" to satisfy the scienter requirement.