James C. Dugan, a partner at Willkie Farr & Gallagher, writes that decisions issued since Stoneridge suggest that lower courts are inclined to read the Supreme Court's holding broadly and dismiss claims against any third parties, regardless of their affiliation with an issuer, who are not alleged to have participated in preparing or disseminating false financial statements or other public statements. One interesting question left open is the degree to which a third party's active participation in drafting or preparing false statements that are then communicated to investors gives rise to a duty to disclose and whether the existence of such a duty trumps the fact that the false statements were not publicly attributable to the third party.
Whither 'Stoneridge v. Scientific-Atlanta'? Early Results
New York Law Journal
July 8, 2008
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