Macquarie Infrastructure Corp. v. Moab Partners, L.P.
Issues
Can investors bring a private claim of action against an issuer under § 10(b) of the Securities Exchange Act based on the omission of information required under Item 303 of Regulation S-K when the omitted information is not accompanied by a misleading statement?
This case asks the court to determine whether investors may bring a private claim against an issuer under § 10(b) of the Securities Exchange Act of 1934 for an omission without an associated misleading statement, known as a “pure omission,” based on the disclosure requirements set by Item 303 of SEC Regulation S-K. Macquarie Infrastructure Corporation argues that investors cannot bring a private claim for a pure omission because the text and statutory context of § 10(b), Rule 10b-5, and Item 303 do not support such claims. In opposition, Moab Partners, L.P. argues that investors may bring a private claim for a pure omission because Supreme Court precedent and statutes comparable to § 10(b) indicate that investors may bring such claims. This case touches on important questions regarding disclosure requirements, issuer liability for omissions, and the suitability of enforcement of securities regulations through private lawsuits.
Questions as Framed for the Court by the Parties
Whether the U.S. Court of Appeals for the 2nd Circuit erred in holding that a failure to make a disclosure required under Item 303 of SEC Regulation S-K can support a private claim under Section 10(b) of the Securities Exchange Act of 1934, even in the absence of an otherwise misleading statement.
Macquarie Infrastructure Corporation (“Macquarie”) is a publicly traded holding company managed by MIMUSA, with several subsidiaries. City of Riviera Beach Gen. Emples. Ret. Sys. v.
Additional Resources
- Jay B. Kasner and Mollie Melissa Kornreich, Section 10(b) Litigation: The Current Landscape, American Bar Association (Oct. 20, 2014).
- Lawrence J. Hayes, Tort Liability for Misstatements or Omissions in Sales of Securities, Cleveland State Law Review (1963).
- Martina Barash, Macquarie Urges Supreme Court to Disallow ‘Pure Omission’ Claims, Bloomberg Law (Nov. 14, 2023).
- Rule 10b-5, Legal Information Institute.