Michelle Reed Quoted on Second Circuit Ruling Regarding Investor Disclosures
The New York Law Journal has quoted Akin Gump litigation partner Michelle Reed in the article “How Second Circuit’s ‘Stadnick’ Decision Provides Securities Clarity,” looking at the impact of a ruling last week by the U.S. Court of Appeals for the 2nd Circuit in Stadnick v. Vivint Solar. The decision, as the article reports, is a split from a 1st Circuit ruling pertaining to the disclosure of information to investors, and it sets a new standard for dealing with Section 11 of the U.S. Securities Act.
The lead plaintiff in the case had sued Vivint Solar and its underwriters after the company’s stock price dropped shortly after it issued an initial public offering, arguing that the company misled investors by not making its third-quarter losses publicly available at the time of issuance. Those quarterly results came out a month after the IPO.
Reed commented, “If your IPO is really close to quarter’s end, I think this gives you greater pause as to how you’re reporting and what you’re reporting.”