Longman v. Food Lion, Inc.
United States Court of Appeals for the Fourth Circuit
197 F.3d 675 (1999)
After ABC reported labor and sanitation problems at three of Food Lion's (defendant) 1,000 stores, its stock dropped sharply, and shareholders (plaintiffs) sued claiming the company's prior public statements and omissions about labor practices and cleanliness artificially inflated its stock; but a labor union had filed a nearly identical complaint over a year earlier, and Food Lion's stock hadn't reacted to that complaint at all. The district court found the statements and omissions immaterial, and Longman appealed.
Whether disclosure of information is material under section 10(b) of the Securities Act of 1934 if the market already knew of the information at the time of disclosure.