Stockwatch: Unintended consequences
This article was originally published in Scrip
Executive Summary
A recent US Supreme Court ruling allowing the continuation of a dispute between investors in the company Matrixx Initiatives and the company, could have ramifications far beyond those being debated in the case. The Matrixx position is based around its duty (or not) to disclose confidential adverse reporting events for its drug as Matrix considered the number of adverse events to be too small to be material. Matrixx investors, however,have argued that, in this case, the adverse reports were highly material. This was a view that was supported by the stock price reaction when the reports came to light (scripintelligence.com, 23 March 2011).