The United States Securities and Exchange Commission ("SEC"), through its regulatory releases under Item 303, has defined the circumstances under which a reporting company must disclose corporate information to the public. Two conditions determine the necessity of disclosure. First, management must assess whether or not a known trend or event is reasonably likely to occur. Second, if the answer is either indeterminate or affirmative, disclosure is required if the known trend or event would have a material effect upon the company's financial condition.

The question at hand is whether the SEC's regulatory framework is to be given controlling weight in consonance with the Court's prior ruling in United States v. O'Hagan, 521 U.S. 642, 673 (1997) "This Court must accord the SEC's assessment in that regard controlling weight unless it is arbitrary, capricious, or manifestly contrary to the statute." or whether lower courts, as they did in this instance, are free to substitute their judgment in deciding upon the adequacy of corporate disclosure.

The Court has held that "half-truths—representations that state the truth only so far as it goes, while omitting critical qualifying information—can be actionable misrepresentations. This rule recurs throughout the common law. ... we have used this definition in other statutory contexts. See, e.g., Matrixx Initiatives, Inc. v. Siracusano, 563 U.S. 27, 44 (2011) (securities law)." Universal Health Services, Inc. v. United States, 579 U.S. (2016).

Adjunctive to this ruling, cases in the circuit courts have held to the maxim that "where a party without a duty elects to disclose material facts, he must speak fully and truthfully, and provide complete and non-misleading information with respect to the subjects on which he undertakes to speak" SEC v. Curshen, No. 09-1196 (10th Cir. 2010) see also In Re: K-TEL International, Inc. Securities Litigation (8th Cir. 2002) "even absent a duty to speak, a party who discloses material facts in connection with securities transactions assume[s] a duty to speak fully and truthfully on those subjects."

The facts of Curshen, where defendant posted misleading statements on an internet bulletin board in furtherance of a stock pump and dump scheme, were distinguished from the instant case, by the courts below, asserting that "Here, Loughrey [the CEO] was merely answering questions put to him by analysts".

Accordingly, the question presented is whether or not a corporate officer on an investor conference call may declaim half-truths because he is 'merely answering questions put to him by analysts'.

III. Several of the circuit courts including the Tenth, have addressed the issue as to whether or not knowledge may be imputed to one side in a securities action based upon the statutory language of section 12(2) and the various state uniform securities acts that were in part modeled thereafter. All have come to the same conclusion. "Taken together, section 12(2) and its case law support our conclusion that the plain meaning of both section 12(2) and section 408(a)(2) requires only that purchasers of securities show a lack of actual knowledge of a material omission in order to prevail." MidAmerica Fed. S L v. Shearson/American, 886 F.2d 1249, 1257 (10th Cir. 1989).

The courts below found that because Plaintiffs had read a portion of the

Whether the SEC's regulatory framework under Item 303 should be given controlling weight or if lower courts can substitute their own judgment on the adequacy of corporate disclosure