Omnicare and GAAP-Based Numerical Opinions

Price: $224 OnDemand

Linda L. Griggs
Partner, Morgan, Lewis & Bockius LLP
Christian J. Mixter
Partner, Morgan, Lewis & Bockius LLP


On March 24, 2015, the Supreme Court decided Omnicare, Inc. v. Laborers District Council Construction
Industry Pension Fund. Vacating a ruling by the Sixth Circuit Court of Appeals that liability under Section 11 of the Securities Act of 1933 for a statement of opinion may be premised simply on a showing that the opinion was materially incorrect, the Supreme Court held that an opinion can only be an ‘‘untrue statement of a material fact’’ if the speaker does not sincerely hold that opinion, or if the opinion contains an embedded statement of a materially untrue fact.

However, the Supreme Court went on to decide that a sincerely-held but incorrect opinion can violate Section 11’s further prohibition on statements that ‘‘omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading’’ if the speaker omits material facts about his inquiry into, or knowledge concerning, a statement of opinion, and the omitted facts conflict with what a reasonable investor, reading the statement fairly and in context, would take from the statement itself. Omnicare thus clarifies the legacy of Virginia Bankshares v. Sandberg, which four courts of appeals had read to stand for the proposition that an opinion statement can give rise to liability only if the speaker subjectively disbelieved the statement.

Educational Objectives:
• Analyze possible steps that issuers should consider in drafting disclosures for registration statements to be filed under the Securities Act and for periodic reports under the Exchange Act
• Address identifying numerical opinions as ‘‘opinions’’
• Explore drafting disclosures to, among other things, explain why such ‘‘opinions’’ would differ based on different assumptions, judgments, and estimates
• Review disclosure that weigh against the assumptions, judgments, or estimates underlying the numerical opinions

Who would benefit most from attending this program? 
Lawyers, public and private companies, non-profit organizations, institutional investors in corporate, corporate governance and securities regulation.



Linda L. Griggs is a partner at Morgan, Lewis & Bockius LLP. Her practice focuses on securities regulation and corporate law matters. She draws on her experience as a former chief counsel to the chief accountant of the United States Securities and Exchange Commission to advise clients on issues related to financial reporting, accounting, and other disclosure requirements under securities laws and public and private securities offerings. Linda also advises clients on the fiduciary duties of directors and officers, as well as corporate governance matters. She is a member of the District of Columbia bar. 


Christian J. Mixter is a partner at Morgan, Lewis & Bockius LLP. He represents clients in a range of securities disputes, including litigation involving the US Securities and Exchange Commission, self-regulatory organizations, shareholder class actions, and state government enforcement proceedings and investigations. Chris represents public companies, broker-dealers, investment advisers, and their employees in disclosure and accounting disputes, trading and insider trading cases, and hedge fund and mutual fund matters. He is a member of the District of Columbia and New York bars.