Navigating Risk Factor Disclosures: A New, Outlier Ninth Circuit Approach Remains After the Supreme Court Declines to Resolve a Circuit Split in In re Facebook Securities Litigation

Authors

Jessica K. Kocinski, University of San Diego School of Law

Library of Congress Authority File

http://id.loc.gov/authorities/names/n79122466.html

Document Type

Casenotes

Abstract

This Casenote examines the implications of the Supreme Court’s recent decision in Amalgamated Bank to dismiss Facebook’s writ of certiorari as improvidently granted, thereby allowing the shareholders’ securities fraud class action lawsuit to proceed in the lower courts.  Specifically, it focuses on whether Facebook shareholders adequately alleged securities fraud under Section 10(b) and Rule 10b-5 as to challenged risk factor disclosures in Facebook’s 2016 Form 10-K under the PSLRA’s heightened pleading standard.  Part II of this Casenote provides background on the Cambridge Analytica data breach, which Facebook allegedly failed to disclose in its 2016 Form 10-K risk factor disclosures.  Part III discusses In re Facebook, the Ninth Circuit precedent left untouched after the Supreme Court dismissed Facebook’s writ of certiorari, and covers the relevant law, facts, and procedural history, and the Ninth Circuit’s majority and dissenting opinions.  Part IV reviews the Ninth Circuit’s reasoning for its decision in In re Facebook.  Part V outlines the current circuit split on risk factor disclosures.  Finally, Part VI provides guidance for public companies navigating risk factor disclosures in the Ninth Circuit post-In re Facebook.

Recommended Citation

Jessica K. Kocinski, Navigating Risk Factor Disclosures: A New, Outlier Ninth Circuit Approach Remains After the Supreme Court Declines to Resolve a Circuit Split in In re Facebook Securities Litigation, 62 San Diego L. Rev. 837 (2025).
Available at: https://digital.sandiego.edu/sdlr/vol62/iss4/5