Can a public company violate the federal securities laws simply by expressing an opinion that turns out to be wrong? In 2013, the U.S. Court of Appeals for the Sixth Circuit startled the business community by recognizing just such a broad theory of liability. This week, in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, the Supreme Court of the United States restored some sanity to this area by vacating the Sixth Circuit’s judgment. But Omnicare’s narrower theory of liability suggests that litigation over statements of opinion will continue apace, as litigants and lower courts grapple with the question of what factual basis a reasonable investor would take those statements to imply.

At issue in Omnicare were opinion statements in a public company’s registration statement, to the effect that “we believe we are obeying the law” governing payments from pharmaceutical companies. The plaintiffs claimed that two such statements by Omnicare violated Section 11 of the Securities Act of 1933, which assigns liability for a registration statement that “contain[s] an untrue statement of a material fact” or “omit[s] to state a material fact . . . necessary to make the statements therein not misleading.” The Sixth Circuit agreed with the plaintiffs, holding that “a statement of opinion that is ultimately found incorrect—even if believed at the time made—may count as an ‘untrue statement of a material fact.’ ” On this view, the challenged opinion statements were actionable under Section 11 because the Federal Government subsequently accused Omnicare of violating anti-kickback laws by taking money from drug manufacturers.