This month we discuss Iowa Public Employees’ Retirement System v. MF Global, Ltd.,1 in which the U.S. Court of Appeals for the Second Circuit addressed the bespeaks-caution doctrine and loss causation defense in the context of securities claims brought under §§11 and 12 of the Securities Act of 1933. The decision, written by Chief Judge Dennis Jacobs, and joined by Judges Barrington D. Parker and Peter W. Hall, examined two sets of alleged misstatements and omissions contained in defendant hedge fund’s Prospectus and Registration Statement.
Vacating a portion of the lower court’s opinion, the Second Circuit clarified the bespeaks-caution doctrine and its application to statements that “contain some elements that look forward and others that do not.”2 In addition, the appellate court relied upon the affirmative defense of loss causation to affirm the dismissal of one of plaintiffs’ claims because it was “apparent on the face of the complaint” that the alleged omission did not cause plaintiffs’ damages.3
Procedural History
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