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E-MailThe following post comes to us from David Tabak, Senior Vice President at National Economic Research Associates.
The US Supreme Court will soon consider whether information needs to be statistically significant for it to be deemed material and required to be disclosed by a company. To understand this issue, one must understand both statistical significance and materiality. If this is a topic of interest to you, then you may want to read a new NERA paper on the subject, The Matrixx of Materiality and Statistical Significance in Securities Fraud Cases. This is an expanded version of an article that you may have seen on Law360.com.
In this paper, Boies, Schiller & Flexner attorney Frederick Lee and I discuss the concepts of statistical significance and materiality, showing the potential overlap between the two concepts under different definitions of materiality. We discuss how statistical significance can be a useful tool to help litigators and courts examine materiality and show how, depending on the type of data being examined, statistical significance has different implications for whether information would be material for investors.
The full paper is available for download here.
