A company’s valuations of its goodwill and loss reserves are opinions that are not subject to a strict liability standard under securities laws, the U.S. Court of Appeals for the Second Circuit has expressly ruled for the first time.
Tuesday’s ruling came in a purported class action brought by investors in preferred securities issued by Regions Financial Corporation who tried to hold the company liable for allegedly overstating goodwill and failing to increase loan loss reserves enough before the 2008 financial crisis.
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