This Article adds to the scholarly literature about the optimal level of disclosure by issuers of securities by proposing a new theoretical framework that encompasses not only the choice between silence and disclosure, which has been widely discussed, but also the subsidiary decision between disclosure as an opinion and as a statement of fact, which has been ignored. This framework informs the Securities and Exchange Commission’s ongoing review of mandatory disclosure rules and contextualizes the potential impacts of the Supreme Court’s recent decision in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund,1 which clarified that differential liability standards apply depending on whether a disclosure is expressed as an opinion or as a statement of fact. In addition, this Article, drawing from a collection of 1,264 post-Omnicare opinion disclosures, provides an in-depth qualitative review of the types of disclosures that issuers are choosing to express as opinions rather than as statements of fact. Finally, this Article analyzes these post-Omnicare opinion disclosures under the proposed theoretical framework and concludes that several discrete adjustments are required to incentivize optimal issuer disclosure decisions.
86 U. Cin. L. Rev. 587 (2018)