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Paul Kisslinger Pens Law360 Expert Analysis on Anticipated Supreme Court Corporate Disclosure Ruling

Washington D.C. (October 27, 2023) - Washington D.C. Partner and Chair of Lewis Brisbois’ SEC Enforcement & Litigation Practice Paul W. Kisslinger recently authored an Expert Analysis article for Law360 titled, “How Justices' Disclosure Ruling May Change Corp. Filings.” The article discusses a case that is currently pending before the U.S. Supreme Court, in which the Court is expected to issue a significant ruling on companies’ disclosure obligations under federal law. 

Mr. Kisslinger opens the article by warning, “Public companies and private securities practitioners take note: Disclosure obligations may soon become more onerous.” He then goes on to describe the matter of Macquarie Infrastructure Corp. v. Moab Partners LP, in which the Court “will rule on a circuit split over whether the failure to disclose information required in the management discussion and analysis (MD&A) portion of a company's public filings — such as the annual 10K and quarterly 10Q forms — may be actionable in a private securities fraud action brought under Section 10(b) of the Securities Exchange Act.”  

Mr. Kisslinger explains that in the Supreme Court case, Macquarie Infrastructure Corp. (MIC) contends that the Court should overturn a Second Circuit decision permitting a class of investors, led by hedge fund Moab Partners, to proceed with its claims under Section 10(b) of the Securities Exchange Act. Moab’s complaint alleges that MIC defrauded investors by failing to predict and disclose that a regulation issued by the United Nations' International Maritime Organization that capped the sulfur content of fuel oil would have a material negative impact on the company's bottom line. 

Next, Mr. Kisslinger reviews the procedural history of the matter, ultimately noting, “How the Supreme Court rules will be an important decision. It goes to the heart of a fundamental question about a public company's disclosure obligations: Does a company's duty to disclose arise any time there is a "statute or regulation requiring disclosure," as the Second Circuit holds, or does its duty only arise with respect to not making false or misleading statements?” The author describes the “big difference” between these standards, discusses the parties’ respective arguments, and opines on the potential implications of applying each approach. He closes the article by observing, “Regardless of which way the Supreme Court rules, it is guaranteed that this decision will be closely followed and much-debated by all interested stakeholders on both sides of the issue. In the meantime, public companies should ensure that their disclosures take careful account of this evolving area of the law.” 

Mr. Kisslinger joined Lewis Brisbois earlier this year as chair of its SEC Enforcement & Litigation Practice after spending almost two decades with the SEC, most recently as its assistant chief litigation counsel. He also serves as co-chair of the firm's Securities Class Action Defense Practice. Mr. Kisslinger has extensive experience in the private and public sectors successfully guiding clients through the choppy waters of regulatory enforcement actions brought by securities and other financial services regulators, internal and external investigations, and legislative inquiries. 

Read the full Law360 Expert Analysis here (subscription may be required). 

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