INVESTOR

Issues

This case asks the Supreme Court to determine whether a company’s risk disclosure to investors is false or misleading when the company does not disclose a risk that has materialized in the past, even when that past event poses no risk of ongoing or future harm to the company. In this case, Facebook failed to disclose a past data breach, the Cambridge Analytica Scandal, in its 2016 10-K disclosures. Shareholders sued the company and its executives, arguing that the failure to disclose this information was false or misleading. On one hand, Facebook argues that it does not have to disclose such past events in the form at issue because risk disclosures are forward-looking and investors understand that. On the other hand, Amalgamated Bank contends that companies must disclose information about past bad events because stating a risk as a hypothetical event could mislead investors into believing there have been no past bad events. The outcome of this case will affect the requirements of risk disclosures, which could impact the quantity and quality of disclosure information, how much companies must disclose, and whether investors’ demands are met.

Questions as Framed for the Court by the Parties

Additional Resources