SS M&A Litigation Outlook - Flipbook - Page 31
Jaroslawicz v. M&T Bank Corp.,
No. 17-3695 (3d Cir. June 18, 2020)
Why it is important
In Jaroslawicz v. M&T Bank Corp., the United
States Court of Appeals for the Third Circuit held
that a company seeking shareholder approval for
a merger must include company-specific, rather
than generic, descriptions of industry, company,
and investment risks and concise, plain English
explanations of the most significant risk factors
associated with the proposed transaction in order
to comply with SEC rules (specifically, Item 105 of
Regulation S-K). The court held that the putative
class plaintiffs stated viable claims that the banks
did not adequately disclose risks associated with
regulatory scrutiny of one of the merging banks’
checking account and anti-money laundering
practices, despite knowing that this “regulatory
scrutiny could sink the merger.” Although the
court reinstated the action, it did so expressing
“worry over the many well-argued doubts about
these kinds of aggregate claims[,]” pointing to
the continued rise in securities class actions each
year and urging “a more searching inquiry” into
whether “that tide represents an efficient current or
‘muddled logic and armchair economics[.]’”
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