A U.S. Court of Appeals for the Fourth Circuit decision reinforces that securities fraud liability "cannot be 'predicated solely on an overly optimistic view of a future which may, in fact, encounter harsh economic realities down the road.'"

In a recent decision, San Antonio Fire & Police Pension Fund v. Syneos Health, the Fourth Circuit considered a class action lawsuit brought by shareholders of a biopharma company, INC Research Holdings, Inc. (now Syneos Health Inc.). The shareholders had voted to approve a merger with a private company. They had high hopes for the merged entity, inflated by some optimistic projections INC Research and its executives had made. But the new company struggled and its stock price tanked.