In re Time Warner Inc. Securities Litigation
United States Court of Appeals for the Second Circuit
9 F.3d 259 (2d Cir. 1993)
Time Warner (TW) (defendant) publicly stated its debt-reduction strategy was securing strategic partnerships, but when that approach faltered, TW began seriously considering — without public disclosure — an alternative stock offering that would significantly dilute existing shareholders; stock purchasers (plaintiffs) sued under SEC Rule 10b-5, citing both attributed TW statements and anonymous statements to reporters and analysts, and the district court dismissed for failure to identify an actionable false statement or omission and for failure to plead scienter.
If a corporation announces that it is pursuing a specific business goal and its intended approach for reaching it, might the corporation be obligated to disclose other approaches under active and serious consideration?