In Dura Pharmaceuticals v. Broudo, the Supreme Court held that in private securities fraud cases, one element of proving a violation is "loss causation," which requires showing "a causal connection between the material misrepresentation and the loss".
If you lie to your insurance company or omit to tell them about something that affects the rate (a young driver in your household, for example,) this could be considered a "material misrepresentation" and any claim you make may be denied.
"The league management at the time, including Aaron Davidson, made material misrepresentations and omissions regarding the integrity of the league and its financial hygiene".
This year, Biovail paid $128 million in damages to settle a class-action lawsuit accusing the company of making material misrepresentations and omissions in its financial and public statements.
Greenberg said AIG's "material misrepresentations and omissions"had caused him to acquire shares as part of various deferred compensation plans at an inflated price, and later to lose nearly his entire investment after AIG's losses became known.
Plaintiffs lawyers are circling with the predictable shareholder lawsuits, many complaining of "material misrepresentations" and "false assurances" made by InterCept about iBill's dependence on porn (a press release at the time of the acquisition benignly referred to iBill's clientele as "Web merchants," while management claimed that adult sites represented less than 10% of iBill's transactions).
The company's "material misrepresentations and omissions" caused him to acquire New York-based AIG shares in his deferred compensation profit-participation plan at an "artificially inflated price".
Litigants can expect that the Court of Chancery only will approve future disclosure-only settlements if the disclosures "address a plainly material misrepresentation or omission," and the releases granted in connection with the settlement are limited to disclosure claims.
As for Cesar, court records indicated that he had been a sales manager at Infoex International, a short-lived currency-market brokerage that was shuttered after the Commodity Futures Trading Commission charged it with "fraud" and "material misrepresentation".
Thus, if the insured made a material misrepresentation when the policy was originally obtained, and this misrepresentation is not discovered until after the contestable period, beneficiaries may still receive the value of the policy so long as the premiums are maintained.
"It's always fraudulent when you have a material misrepresentation, deliberately made, with the intent to deceive and for personal gain," said Gil M. Soffer, who oversees corporate fraud prosecutions at the Justice Department.
