Shariah’s Black Box

[221] 375 U.S. 180, 195 (1963). For a discussion of whether there is a private right of action to void contracts under Section 215 of the Investment Advisors Act, see Transamerica Mortg. Advisors (tama) v. Lewis, 444 U.S. 11, 18-19 (1979); see also Loss & Seligman, supra note 10, at 1241-47.

[222] See supra note 211; see also Jeffrey W. Stempel, Class Actions and Limited Vision: Opportunities for Improvement Through a More Functional Approach to Class Treatment of Disputes, 83 Wash. U. L. Rev. 1127 (2005) (discussing the Class Action Fairness Act of 2005 (CAFA)).

[223] 425 U.S. 185 (1976); see also Sundstrand Corp. v. Sun Chemical Corp., 553 F.2d 1033 (7th Cir. 1977) (stating the classic “recklessness” standard as follows: “[H]ighly unreasonable [conduct], involving not merely simple, or even inexcusable negligence, but an extreme departure from the standards of ordinary care, and which presents a danger of misleading buyers or sellers that is either known to the defendant or is so obvious that the actor must have been aware of it”).

[224] See supra note 191; see also City of Monroe Employees Ret. Sys. v. Bridgestone, 399 F.3d 651, 687 (6th Cir. 2005). In the Bridgstone case, the court quoted Rubin v. Schottenstein, 143 F.3d 263, 267 (6th Cir. 1998) (en banc), as follows:

The question thus is not whether a [defendant’s] silence can give rise to liability, but whether liability may flow from his decision to speak . . . concerning material details . . ., without revealing certain additional known facts necessary to make his statements not misleading. This question is answered by the text of [SEC] Rule 10b-5(b) itself: it is unlawful for any person to “omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading . . . .”

Bridgestone, 399 F.3d at 687.

[225] See Bridgestone, 399 F.3d at 669 (quoting Helwig v. Vencor, Inc., 251 F.3d 540, 555 (6th Cir. 2001)), wherein the court explained that “[a]s for materiality, whether or not a statement is material turns on ‘a fact-intensive test.’” The court also stated that  “‘[m]ateriality depends on the significance the reasonable investor would place on the withheld or misrepresented information.’” Id. (quoting Basic Inc. v. Levinson, 485 U.S. 224, 240 (1988)). That is, would the information, had it been presented accurately, have “‘significantly altered the ‘total mix’ of information made available?’” 251 F.3d at 563 (quoting Basic, 485U.S. at 231-32).

[226] See Bridgestone, 399 F.3d at 669 (citing PR Diamonds, Inc. v. Chandler, 364 F.3d 671, 680 (6th Cir. 2004)).

[227] These “rubrics” are derived from the nine illustrative factors in Helwig, which are often cited by other courts.

[228] Ariz Ariz. Rev. Stat. Ann. § 44-1991 (1999); see also Richard G. Himelrick, Arizona Securities Fraud Liability: Charting a Non-Federal Path, 32 Ariz. St. L.J. 203 (2000).

[229] See id. at 230 & n. 186.

[230] See supra note 145.