On Sept. 29, 2023, the U.S. Supreme Court granted certiorari in a case that will become Macquaire Infrastructure Corp. v. Moab Partners L.P., to consider whether the failure to make disclosures required under Item 303 of the SEC’s Regulation S-K can support an action for securities fraud under Rule 10b-5. As all securities practitioners know, Item 303 requires a “reporting” company to disclose in its periodic SEC filings any “known trend, demand, commitment, event or uncertainty” that will result or is reasonably likely to result in material changes to the issuer’s liquidity, capital resources or results of operations.

Immediately following the court’s grant of certiorari, a number of prominent law firms circulated memos to their clients, pointing out (sometimes with high enthusiasm) that the Second Circuit’s decision was in conflict with recent decisions in the Third, Ninth and Eleventh circuits. See, e.g., Oran v. Stafford, 226 F.3d 275 (3d Cir. 2000); In re Nividia Corp. Sec. Litig., 768 F.3d 1046 (9th 2014); Carveil v. Ocwen Fin. Corp., 934 F.3d 1307 (11th Cir. 2019). Worse yet for the SEC’s chances, the Third Circuit’s decision was authored by Justice Samuel Alito, then sitting on that circuit. Finally, this was not the first time the court has granted cert on this issue. In Leidos v. Indiana Pub. Ret. Sys., 137 S. Ct. 1395 (2017), the court also did so, only to see the case settle before it could be heard.