## Facts

- Omnicare, Inc. conducted a public offering of stock in December 2005 using an SEC registration statement.
- The registration statement included opinions that Omnicare “believe[d]” its contractual arrangements and pharmacy practices complied with federal and state law and that certain manufacturer contracts were “legally and economically valid.”
- After the offering, the federal government brought actions alleging Omnicare received illegal kickbacks and submitted false claims to federal health-care programs.
- Purchasers of Omnicare stock sued under §11 of the Securities Act of 1933, alleging the registration statement contained untrue material statements and omitted material facts needed to make the statements not misleading.
- The district court dismissed, reasoning the complaint failed to allege Omnicare subjectively knew the opinions were false.
- The Sixth Circuit reversed in relevant part, holding that alleging the opinions were objectively false was sufficient.
- The Supreme Court granted review to clarify when statements of opinion in a registration statement are actionable under §11.

## Issues

1. Whether a statement of opinion in a registration statement is an “untrue statement of a material fact” under §11 merely because it later proves incorrect, absent allegations that the speaker did not actually hold the opinion.
2. When an opinion statement becomes “misleading” under §11’s omissions clause because of undisclosed facts about the issuer’s inquiry into or knowledge supporting the opinion.

## Decision

- The Supreme Court vacated the Sixth Circuit’s judgment and remanded.
- Under §11’s false-statement clause, an opinion is not actionable solely because it turns out to be wrong; liability requires that the issuer did not sincerely hold the belief or that the opinion contained an untrue embedded factual assertion.
- Under §11’s omissions clause, an opinion can be actionable if the issuer omits material facts about its inquiry or knowledge and the omission makes the opinion misleading to a reasonable investor reading the statement fairly and in context.
- The Court held the complaint’s bare allegation of “objective falsity” was insufficient for the false-statement theory and directed lower courts to evaluate the pleading under the omissions framework.

## Legal Principles

- A statement of opinion is not an “untrue statement of ... fact” under §11 simply because subsequent events show the opinion was incorrect.
- Opinion liability under §11’s false-statement prong exists when:
  - the speaker did not actually hold the stated belief, or
  - the opinion includes an embedded statement of fact that is untrue.
- Even sincerely held opinions may be actionable under §11’s omissions prong when the issuer omits material facts about the basis for the opinion that would conflict with what a reasonable investor would understand the opinion to convey.
- The “reasonable investor” inquiry is contextual; surrounding disclosures, risk warnings, and qualifications affect what the opinion communicates.
- Plaintiffs pursuing an omissions theory must identify specific, material omitted facts about the issuer’s inquiry or knowledge; §11 does not require disclosure of all contrary information or guarantee that opinions are correct.

## Conclusion

The Court held that §11 does not impose liability for honestly held opinions that later prove wrong, but it can impose liability when an issuer’s opinion misleads reasonable investors by omitting material facts about the opinion’s foundation; the case was vacated and remanded for application of these standards.


Omnicare, Inc. v. Laborers Dist. Council Constr. Indus. Pension Fund, 575 U.S. 175 (2015)