Fleming, a publicly held company, and several officers of the company, were sued by various stockholders for securities fraud for filing documents that were materially misleading. The stockholders contended that information failed to discuss litigation lost by Fleming that resulted in a damage award of $200 million, which saw the company's stock fall by about 25 percent. The stock price recovered some, after part of the trial verdict was set aside, and Fleming settled the case by paying $20 million.
Stockholders contended that failure to fully reveal the risks of that litigation caused losses to investors in Fleming stock. The district court dismissed the suit because the plaintiffs failed to show that Fleming made deliberate and materially misleading statements or omissions. Stockholders appealed; did they have a case?
[City of Philadelphia v. Fleming Co., 264 F.3d 1245, 10th Cir. (2001)]