U.S. Supreme Court

Case Status


Docket Number



Cert. Denied

Lower Court Opinion

U.S. Court of Appeals for the Second Circuit


Case Updates

Cert. petition denied

October 03, 2011

NCLC urges Supreme Court to consider materiality requirement for securities lawsuits

August 01, 2011

NCLC urged the U.S. Supreme Court to grant review of this case and to hold that securities plaintiffs must show that a misstatement or the omission of a fact significantly affected expectations about returns of the issuer’s overall business portfolio. In this case, a group of investors sued Blackstone under sections 11 and 12 of the Securities Act of 1933, claiming the company failed to disclose in their IPO certain risks associated with its real estate investments, which accounted for only 0.4% of Blackstone’s assets at the time. The plaintiffs argue they need only allege that a misstatement or omitted fact was “significant” to a quantitatively small segment of the issuer’s financial portfolio (in this case, a mere 0.4% at the time). The “materiality” pleading standard adopted by the Second Circuit would dramatically increase securities issuers’ exposure to unfounded class action lawsuits and, as a result, discourage investment in U.S. public capital markets.

Case Documents