Basic Inc. v. Levinson

Updated 11/9/2023

Paul Weitzel,

Paige G. DuRandt,

Lauren M. Kubat,

Jacob H. Owens, CPA

In the following case, plaintiffs, Max Levinson et al., held shares in the defendant's, Basic Inc., corporation. The plaintiffs brought this action after misleading statements made by Basic Inc. about a potential merger prompted them to sell their shares at a decreased price. The issue here is whether these misleading statements actually constitute "material information." What does constitute material information, also termed materiality? Consider the various tests the Court discusses, and of course the one it chose. How do they compare?

Supreme Court of the United States

485 U.S. 224, 99 L. Ed. 2d 194, 108 S. Ct. 978, SCDB 1987-046, 1988 U.S. LEXIS 1197

No. 86-279

1988-03-07

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