The materiality of misrepresentations and omissions in securities fraud litigation is a complex but critical issue. For several reasons, defendants sometimes give this element of a securities claim less attention than it deserves.
Defendants may avoid vigorously challenging materiality for at least three reasons. First, there may be a tendency to accept the legally deficient but superficially appealing argument that “all information is important and thus material to investors.” Second, particularly if the possible event to which the alleged misrepresentation or omission pertained has occurred since the purchase or sale of the security, hindsight analysis too easily leads one to conclude that “since the event happened, information about it must have been important or material.
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