SCOTUS Narrows Application of Exchange Act Rule 10b-5(b) to Half-Truths

Litigation attorneys Jessica Magee, Brandon King and Hunter Bezner, with contributions from corporate attorneys Mary Ellen Stanley and Amelia Occhino, published an article in The Texas Lawbook about the U.S. Supreme Court's decision regarding "pure omissions" and securities fraud claims. In Macquarie Infrastructure Corp. v. Moab Partners, the court ruled that "pure omissions" cannot support securities fraud claims under Rule 10b-5(b) of the Securities Exchange Act. The authors explain that the court clarified that Rule 10b-5(b) applies only to "half-truths," requiring a plaintiff to show that material information allegedly omitted made some other affirmative statement false and misleading to establish a fraud claim.

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