Do Hypothetical Risk Disclosures Give Rise To Securities Claims?


Mark R.S. Foster Virginia F. Milstead Michelle Portillo

Partners Mark Foster and Virginia Milstead and associate Michelle Portillo look at a recent Ninth Circuit rejection of a securities fraud claim, which held that a hypothetical risk could be insufficient if the allegation fails to disclose a fact suggesting the risk “might” occur. The authors discuss how this decision differs from those of most other courts as well as what it could mean for companies drafting risk disclosures.