Publicly traded companies must disclose information when the company has made a material representation that is false or misleading.  An omitted fact is material if there is a substantial likelihood that (i) a reasonable shareholder would consider it important and (ii) disclosure of the omitted fact would be viewed by a reasonable investor as having significantly altered the “total mix” of available information.1  The materiality of potential misconduct can depend on a number of factors, such as the dollar amount involved in the wrongdoing and any potential benefit derived therefrom (e.g., the value of a secured government contract) in the context of the company’s other profits and revenues.

Similar disclosure standards apply in the UK and in other markets where a company’s securities may be listed.

1 See TSC Indus. v. Northway, Inc., 426 U.S. 438, 448-50 (1976).

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