Supreme Court Decides MD&A Case

It is not often that the U.S. Supreme Court weighs in on the specific disclosure requirements under the federal securities laws, but in the case of Macquarie Infrastructure Corp. v. Moab Partners, L.P., they had occasion to do so in the context of a Rule 10b-5 fraud claim.

Macquarie owned a subsidiary that operates terminals to store bulk liquid commodities including No. 6 fuel oil.  In 2016 the United Nations’ International Maritime Organization formally adopted IMO 2020, a regulation capping the sulfur content of fuel oil used in shipping.  In the ensuing years, Macquarie did not discuss IMO 2020 in its public offering documents or SEC periodic reports.  In February 2018, however, Macquarie announced a drop in the amount of storage contracted for use by its subsidiary due in part to the decline in the No. 6 fuel oil market. Macquarie’s stock price fell 41%.

Plaintiff Moab Partners sued Macquarie and various officers alleging, among other things, that