Matrixx Initiatives, Inc. v. Siracusano

In a unanimous opinion written by Justice Sotomayor, the U.S. Supreme Court affirmed the decision of the Ninth Circuit that plaintiffs stated a claim for securities fraud under §10(b) of the Securities and Exchange Act and SEC Rule 10b-5.  Plaintiffs alleged that Matrixx Initiatives, Inc., and three of its executives failed to disclose reports of a causal link between the Company's leading product, a cold remedy, and loss of smell, rendering statements made by defendants misleading.  The Supreme Court rejected Matrixx's assertion that the complaint did not allege material misrepresentations or scienter because plaintiffs did not allege defendants knew of a statistically significant number of adverse events requiring disclosure.