When To Tell Investors Of Adverse Events? It Depends, Says Supreme Court

Article preview from "The Gray Sheet"- March 28, 2011

A March 22 Supreme Court ruling puts more onus on device makers to establish a defensible policy for determining which adverse events investors need to know about.

When To Tell Investors Of Adverse Events? It Depends, Says Supreme Court

Article preview from "The Gray Sheet"- March 28, 2011

A March 22 Supreme Court ruling puts more onus on device makers to establish a defensible policy for determining which adverse events investors need to know about.

In a unanimous opinion, the court ruled that companies can be sued for failing to disclose adverse event reports about their products even if the reports are not statistically significant. But the ruling also emphasizes that companies do not have to report all product adverse events to investors.

"The question remains whether a reasonable investor would have viewed the nondisclosed information 'as having significantly altered the total mix of information made available,'" writes Justice Sonia Sotomayor, quoting prior case law, in the court's opinion in the case of Matrixx Initiatives Inc. v. Siracusano.

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