Your daily dose of financial news

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Law nerdery meets Wall Street this week, as the Supreme Court resolved a circuit split over the limits of liability for opinions under Section 11 of the Securities Act yesterday in its much-anticipated Omnicare v. Labors District Counsel Construction Industry Pension Fund decision, ruling that statements of opinion in registration statements should not be treated as facts. The Justice Kagan-written opinion set out a legal standard for evaluating a registration statement opinion based on the expectations of a “reasonable” investor, meaning that in order for plaintiffs to proceed with Section 11 claims in this context, they will need to identify “particular (and material) facts” they say were omitted from the registration statement and then show that the absence of such facts made the opinion misleading – Law360 and NYTimes and Bloomberg

Law360’s famous “headshots & quotes” lineup weighs in on the decision – Law360

The Federal Reserve and Office of the Comptroller of the Currency waded into a SDNY dispute this week over a plaintiffs’ motion to compel more than 30k documents related to the oversight of Bank of America, siding with BofA in arguing that the documents are protected by the bank examination privilege.  Plaintiffs accuse the bank and its executives—including current CEO Brian Moynihan—of artificially inflating securities prices by making misleading statements to investors about repurchase claims and compliance with GAAP and federal regulations – Law360

Big Wall Street to Silicon Valley move this week, as Morgan Stanley’s CFO, Ruth Porat, is decamping to Google – WSJ

A Law360 “Trending” piece today looks at a possible shift from rules-based policies to principles-based policies and behavioral economics in the realm of consumer financial product regulation, suggesting that examples for the latter many be found by looking to the UK’s Financial Conduct Authority.  The basic difference is that rules-based policies mostly prohibit specific conduct and prescribe certain processes while the principles-based approach set forth, you guessed it, principles of conduct and investigate the outcomes of transactions to measure adherence to those principles – Law360

Here’s a loosely related look at challenging concept of principles-based investing, with Calpers as the subject of this “Deal Professor” entry – NYTimes

All I know is that my daughter (and Kevin Henkes’ Chrysanthemum) puts ketchup on her macaroni & cheese.  So maybe this was inevitable – NYTimes and WSJ and Bloomberg

Game changer right here – NYTimes

 

MDR

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