context: The Court cannot agree with defendants that the release of an inconspicuous addendum renders misleading financial and other public statements presumptively consistent with the strictures of Section 10(b) and Rule 10b-5, especially where it is unclear that the contents of the addendum directly address the allegedly misleading information in the statements. To immunize the type of conduct alleged here would be to give companies a license to issue groundless appraisals to investors so long as they include a modest footnote or appendix with a kernel of truth that might enable an analyst or accountant to spot the inconsistencies.
citation_a.signal: see
citation_a.identifier: 8 F.3d 1358, 1362-63
citation_a.parenthetical: holding that curative press releases containing a "grain of truth" did not prevent deception of the market due to previous misrepresentations
citation_a.sentence: See S.E.C. v. Rana Research, Inc., 8 F.3d 1358, 1362-63 (9th Cir.1993) (holding that curative press releases containing a “grain of truth” did not prevent deception of the market due to previous misrepresentations); cf. Virginia Bankshares, 501 U.S. at 1097, 111 S.Ct. at 2760-61 (stating that “[i]f it would take a financial analyst to spot the tension between the one and the other, whatever is misleading will remain materially so, and liability should follow”); Gerstle v. Gamble-Skogmo, Inc., 478 F.2d 1281, 1297 (2d Cir.1973) (stating that “it is not sufficient that overtones might have been picked up by the sensitive antennae of investment analysts”); cf. Smallwood v. Pearl Brewing Co., 489 F.2d 579, 603 (5th Cir.), cert. denied, 419 U.S. 873, 95 S.Ct. 134, 42 L.Ed.2d 113 (1974) (noting that “burying the facts, or giving them less than significant emphasis” in a proxy statement can deprive shareholders of “full and honest disclosure”).
citation_b.signal: cf.
citation_b.identifier: 478 F.2d 1281, 1297
citation_b.parenthetical: stating that "it is not sufficient that overtones might have been picked up by the sensitive antennae of investment analysts"
citation_b.sentence: See S.E.C. v. Rana Research, Inc., 8 F.3d 1358, 1362-63 (9th Cir.1993) (holding that curative press releases containing a “grain of truth” did not prevent deception of the market due to previous misrepresentations); cf. Virginia Bankshares, 501 U.S. at 1097, 111 S.Ct. at 2760-61 (stating that “[i]f it would take a financial analyst to spot the tension between the one and the other, whatever is misleading will remain materially so, and liability should follow”); Gerstle v. Gamble-Skogmo, Inc., 478 F.2d 1281, 1297 (2d Cir.1973) (stating that “it is not sufficient that overtones might have been picked up by the sensitive antennae of investment analysts”); cf. Smallwood v. Pearl Brewing Co., 489 F.2d 579, 603 (5th Cir.), cert. denied, 419 U.S. 873, 95 S.Ct. 134, 42 L.Ed.2d 113 (1974) (noting that “burying the facts, or giving them less than significant emphasis” in a proxy statement can deprive shareholders of “full and honest disclosure”).