David SALTZBERG, et al., Plaintiffs-Appellants, Cross-Appellees, v. TM STERLING/AUSTIN ASSOCIATES, LTD., et al., Defendants-Appellees, Cross-Appellants.
We affirm the grant of summary judgment to defendants in this action under section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. In doing so, we accept and apply the “bespeaks caution” doctrine as explained in In re Donald J. Trump Casino Sec. Litig, 7 F.3d 357 (3rd Cir.1993).
The context in which a statement is made is important. When an offering document's projections are accompanied by meaningful cautionary statements and specific warnings of the risks involved, that language may be sufficient to render the alleged omissions or misrepresentations immaterial as a matter of law. The cautionary language used in the private placement memorandum in this case was no boilerplate and was not buried among too many other things, but was explicit, repetitive and linked to the projections about which plaintiffs complain. In the light of the cautionary language in this case, plaintiffs cannot show the necessary misstatement or omission of a material fact.