Federal Case Over an Honest Opinion?
By WILLIAM SULLIVAN & JOHN DURRANT
Scenario 1: A pharmaceutical company issues stock, saying in the registration statement that it believes it can expect continued growth in the sales of a key drug. After the offering, sales of the key drug plummet. The stock drops in value. Scenario 2: In making a secondary offering of stock, an originator of residential mortgages says that it adamantly opposes discriminations in lending practices.