On Jan. 16, 2024, the Supreme Court heard MacQuarie Infrastructure Corp. v. Moab Partners, L.P., 2023 WL 7928297 (Nov. 13, 2023), and in due course it will presumably resolve the split that now divides the Second Circuit, on one side, and the Third, Ninth and Eleventh Circuits, on the other. The question before the court is whether the Second Circuit erred in holding "that a failure to make a disclosure required under Item 303 of SEC Regulation S-K can support a private claim under §10(b) of the Exchange Act, even in the absence of an otherwise misleading statement."

That sounds technical (and it is), but if the court does reverse the Second Circuit's long-held position, much more than Item 303's complex standard for materiality will be overturned. Once onto the slippery slope that results from reversing the Second Circuit's position, the likely stopping point may be to read Section 10(b) and Rule 10b-5 to apply, in the case of omissions, only when the issuer has made a prior statement that was or has become materially misleading and needs to be corrected "in order to make the statements made in light of the circumstances under which they were made, not misleading." See 17 C.F.R. §240.10b-5(b). As defendant MacQuarie argues in a heading in its brief to the court: