Bloomberg Law interviewed Partner Michael P. Canty for its article, "Meta, Nvidia Bring Investor Suits' Starting Gate to High Court.” The article explores two requirements to survive a defense dismissal bid that have proven crucial to securities victories—and that SCOTUS is considering this month: risk disclosure claims and expert evidence during the early stages of securities fraud class actions.
Securities fraud claims in the Meta (formerly Facebook) case include disclosures that the company improperly treated the risk of user data misappropriation as hypothetical. Mike explains, “The idea that investors don’t rely on these risk disclosures—it’s not true,” and adds that Facebook’s stock plummeted when the truth was revealed. “It was material to investors.”
The Nvidia case involves allegations that the company misled the market about its dependence on sales to cryptocurrency miners. Investors used an expert report to bolster their claims about the company’s revenue sources. Mike notes, “Foreclosing experts puts investors at a structural disadvantage. The material is sometimes technically complex, and defendants could use that to defeat pleadings if investors can’t present experts to explain the complexities to a district court judge."
The cases are Facebook, Inc. v. Amalgamated Bank and NVIDIA Corp. v. E. Ohman J:or Fonder AB.