Reg S-K and the duty to disclose under Rule 10b-5. The dismissal of a shareholder securities fraud lawsuit has been affirmed by the US Court of Appeals for the Ninth Circuit. The Court found that the district court did not err when it did not consider plaintiffs’ allegations of scienter in the context of Item 303 of Regulation S-K, because Item 303’s disclosure duty is not actionable under Section 10(b) or Rule 10b-5. (10/2/2014) In re Nvidia Corp. Securities Litigation. 

Corrective disclosures. The US Court of Appeals for the Fifth Circuit reinstated a securities fraud lawsuit which had been dismissed for a failure to plead loss causation. The plaintiffs, shareholders in Amedysis, alleged that the company schemed to defraud Medicare. The plaintiffs further claim that when the fraud was revealed in a series of disclosures, plaintiffs incurred an economic loss when the firm’s share price fell. Because it found that none of the disclosures individually constituted a corrective disclosure, the district court dismissed the complaint. But the Fifth Circuit found that when taken together, the reports, executive resignations, governmental investigations, and earnings reports, collectively constituted a corrective disclosure that adequately pleaded loss causation. (10/2/2014) Public Employees’ Retirement System of Mississippi v. Amedisys, Inc.