(Slip Opinion) OCTOBER TERM, 2010 1 

Syllabus 

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is

being done in connection with this case, at the time the opinion is issued.

The syllabus constitutes no part of the opinion of the Court but has been

prepared by the Reporter of Decisions for the convenience of the reader. 

See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337. 

SUPREME COURT OF THE UNITED STATES 

Syllabus 

MATRIXX INITIATIVES, INC., ET AL. v. SIRACUSANO 

ET AL. 

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR 

THE NINTH CIRCUIT 

No. 09–1156. Argued January 10, 2011—Decided March 22, 2011 

Respondents filed this securities fraud class action, alleging that petitioners (hereinafter Matrixx) violated §10(b) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule

10b–5 by failing to disclose reports of a possible link between Matrixx’s leading product, Zicam Cold Remedy, and loss of smell (anosmia), rendering statements made by Matrixx misleading. Matrixx 

moved to dismiss the complaint, arguing that respondents had not

pleaded the element of a material misstatement or omission and the

element of scienter. The District Court granted the motion, but the

Ninth Circuit reversed. It held that the District Court erred in requiring an allegation of statistical significance to establish materiality, concluding instead that the complaint adequately alleged information linking Zicam and anosmia that would have been significant 

to a reasonable investor. It also held that Matrixx’s withholding of 

information about reports of adverse effects and about pending lawsuits by Zicam users gave rise to a strong inference of scienter. 

Held: Respondents have stated a claim under §10(b) and Rule 10b–5.

Pp. 8–22.

(a) To prevail on their claim, respondents must prove, as relevant 

here, a material misrepresentation or omission by Matrixx and scienter. See Stoneridge Investment Partners, LLC v. Scientific-Atlanta, 

Inc., 552 U. S. 148, 157. Matrixx contends that they failed to plead

these required elements because they did not allege that the reports 

Matrixx received reflected statistically significant evidence that Zicam caused anosmia. Pp. 8–9. 

(b) Respondents have adequately pleaded materiality. Pp. 9–19.

(1) Under Basic Inc. v. Levinson, 485 U. S. 224, §10(b)’s material-
2 MATRIXX INITIATIVES, INC. v. SIRACUSANO 

Syllabus 

ity requirement is satisfied when there is “ ‘a substantial likelihood

that the disclosure of the omitted fact would have been viewed by the

reasonable investor as having significantly altered the “total mix” of

information made available.’ ” Id., at 231–232. The Court declined to 

adopt a bright-line rule for determining materiality in Basic, observing that “[a]ny approach that designates a single fact or occurrence as 

always determinative of an inherently fact-specific finding such as

materiality, must necessarily be overinclusive or underinclusive.” 

Id., at 236. Here, Matrixx’s bright-line rule—that adverse event reports regarding a pharmaceutical company’s products are not material absent a sufficient number of such reports to establish a statistically significant risk that the product is causing the events—would

“artificially exclud[e]” information that “would otherwise be considered significant to [a reasonable investor’s] trading decision.” Ibid. 

Matrixx’s premise that statistical significance is the only reliable indication of causation is flawed. Both medical experts and the Food

and Drug Administration rely on evidence other than statistically

significant data to establish an inference of causation. It thus stands 

to reason that reasonable investors would act on such evidence. Because adverse reports can take many forms, assessing their materiality is a fact-specific inquiry, requiring consideration of their source, 

content, and context. The question is whether a reasonable investor 

would have viewed the nondisclosed information “ ‘as having significantly altered the “total mix” of information made available.’ ” Id., at 

232. Something more than the mere existence of adverse event reports is needed to satisfy that standard, but that something more is 

not limited to statistical significance and can come from the source, 

content, and context of the reports. Pp. 9–16.

(2) Applying Basic’s “total mix” standard here, respondents adequately pleaded materiality. The complaint’s allegations suffice to

“raise a reasonable expectation that discovery will reveal evidence”

satisfying the materiality requirement, Bell Atlantic Corp. v. 

Twombly, 550 U. S. 544, 556, and to “allo[w] the court to draw the

reasonable inference that the defendant is liable,” Ashcroft v. Iqbal, 

556 U. S. ___, ___. Assuming the complaint’s allegations to be true, 

Matrixx received reports from medical experts and researchers that

plausibly indicated a reliable causal link between Zicam and anosmia. Consumers likely would have viewed Zicam’s risk as substantially outweighing its benefit. Viewing the complaint’s allegations as

a whole, the complaint alleges facts suggesting a significant risk to

the commercial viability of Matrixx’s leading product. It is substantially likely that a reasonable investor would have viewed this information “ ‘as having significantly altered the “total mix” of information made available.’ ” Basic, supra, at 232. Assuming the 
Cite as: 563 U. S. ____ (2011) 3 

Syllabus 

complaint’s allegations to be true, Matrixx told the market that revenues were going to rise 50 and then 80 percent when it had information indicating a significant risk to its leading revenue-generating 

product. It also publicly dismissed reports linking Zicam and anosmia and stated that zinc gluconate’s safety was well established,

when it had evidence of a biological link between Zicam’s key ingredient and anosmia and had conducted no studies to disprove that

link. Pp. 16–19.

(c) Respondents have also adequately pleaded scienter, “ ‘a mental

state embracing intent to deceive, manipulate, or defraud,’ ” Tellabs, 

Inc. v. Makor Issues & Rights, Ltd., 551 U. S. 308, 319. This Court 

assumes, without deciding, that the scienter requirement may be satisfied by a showing of deliberate recklessness. Under the Private Securities Litigation Reform Act of 1995, a complaint adequately pleads

scienter “only if a reasonable person would deem the inference of scienter cogent and at least as compelling as any opposing inference one

could draw from the facts alleged.” Id., at 324. Matrixx’s proposed 

bright-line rule requiring an allegation of statistical significance to 

establish a strong inference of scienter is once again flawed. The 

complaint’s allegations, “taken collectively,” give rise to a “cogent and 

compelling” inference that Matrixx elected not to disclose adverse

event reports not because it believed they were meaningless but because it understood their likely effect on the market. Id., at 323, 324. 

“[A] reasonable person” would deem the inference that Matrixx acted 

with deliberate recklessness “at least as compelling as any [plausible]

opposing inference.” Id., at 324. Pp. 19–22. 

585 F. 3d 1167, affirmed. 

SOTOMAYOR, J., delivered the opinion for a unanimous Court. 
_________________ 

_________________ 

Cite as: 563 U. S. ____ (2011) 1 

Opinion of the Court 

NOTICE: This opinion is subject to formal revision before publication in the

preliminary print of the United States Reports. Readers are requested to

notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order

that corrections may be made before the preliminary print goes to press. 

SUPREME COURT OF THE UNITED STATES 

No. 09–1156 

MATRIXX INITIATIVES, INC., ET AL., PETITIONERS v.

JAMES SIRACUSANO ET AL. 

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 

APPEALS FOR THE NINTH CIRCUIT

[March 22, 2011] 

JUSTICE SOTOMAYOR delivered the opinion of the Court. 

This case presents the question whether a plaintiff can

state a claim for securities fraud under §10(b) of the Securities Exchange Act of 1934, 48 Stat. 891, as amended, 15

U. S. C. §78j(b), and Securities and Exchange Commission 

(SEC) Rule 10b–5, 17 CFR §240.10b–5 (2010), based on a 

pharmaceutical company’s failure to disclose reports of

adverse events associated with a product if the reports do

not disclose a statistically significant number of adverse 

events. Respondents, plaintiffs in a securities fraud class 

action, allege that petitioners, Matrixx Initiatives, Inc.,

and three of its executives (collectively Matrixx), failed to

disclose reports of a possible link between its leading 

product, a cold remedy, and loss of smell, rendering statements made by Matrixx misleading. Matrixx contends 

that respondents’ complaint does not adequately allege 

that Matrixx made a material representation or omission 

or that it acted with scienter because the complaint does 

not allege that Matrixx knew of a statistically significant 

number of adverse events requiring disclosure. We conclude that the materiality of adverse event reports cannot 
2 MATRIXX INITIATIVES, INC. v. SIRACUSANO 

Opinion of the Court 

be reduced to a bright-line rule. Although in many cases 

reasonable investors would not consider reports of adverse 

events to be material information, respondents have alleged facts plausibly suggesting that reasonable investors

would have viewed these particular reports as material.

Respondents have also alleged facts “giving rise to a 

strong inference” that Matrixx “acted with the required

state of mind.” 15 U. S. C. A. §78u–4(b)(2)(A) (Feb. 2011 

Supp.). We therefore hold, in agreement with the Court of

Appeals for the Ninth Circuit, that respondents have 

stated a claim under §10(b) and Rule 10b–5. 

I 

A 

Through a wholly owned subsidiary, Matrixx develops, 

manufactures, and markets over-the-counter pharmaceutical products. Its core brand of products is called Zicam.

All of the products sold under the name Zicam are used to 

treat the common cold and associated symptoms. At the 

time of the events in question, one of Matrixx’s products 

was Zicam Cold Remedy, which came in several forms 

including nasal spray and gel. The active ingredient in

Zicam Cold Remedy was zinc gluconate. Respondents

allege that Zicam Cold Remedy accounted for approximately 70 percent of Matrixx’s sales. 

Respondents initiated this securities fraud class action

against Matrixx on behalf of individuals who purchased 

Matrixx securities between October 22, 2003, and February 6, 2004.1 The action principally arises out of statements that Matrixx made during the class period relating 

to revenues and product safety. Respondents claim that

Matrixx’s statements were misleading in light of reports 

that Matrixx had received, but did not disclose, about 

—————— 

1According to the complaint, Matrixx securities were traded on the 

NASDAQ National Market. App. 99a. 
Cite as: 563 U. S. ____ (2011) 3 

Opinion of the Court 

consumers who had lost their sense of smell (a condition

called anosmia) after using Zicam Cold Remedy. Respondents’ consolidated amended complaint alleges the following facts, which the courts below properly assumed to be 

true. See Ashcroft v. Iqbal, 556 U. S. ___, ___ (2009) (slip 

op., at 14).

In 1999, Dr. Alan Hirsch, neurological director of the 

Smell & Taste Treatment and Research Foundation, Ltd., 

called Matrixx’s customer service line after discovering a 

possible link between Zicam nasal gel and a loss of smell

“in a cluster of his patients.” App. 67a–68a. Dr. Hirsch 

told a Matrixx employee that “previous studies had demonstrated that intranasal application of zinc could be

problematic.” Id., at 68a. He also told the employee about

at least one of his patients who did not have a cold and

who developed anosmia after using Zicam.

In September 2002, Timothy Clarot, Matrixx’s vice 

president for research and development, called Miriam

Linschoten, Ph.D., at the University of Colorado Health 

Sciences Center after receiving a complaint from a person Linschoten was treating who had lost her sense of 

smell after using Zicam. Clarot informed Linschoten that 

Matrixx had received similar complaints from other customers. Linschoten drew Clarot’s attention to “previous

studies linking zinc sulfate to loss of smell.” Ibid. Clarot 

gave her the impression that he had not heard of the 

studies. She asked Clarot whether Matrixx had done any 

studies of its own; he responded that it had not but that it 

had hired a consultant to review the product. Soon thereafter, Linschoten sent Clarot abstracts of the studies she 

had mentioned. Research from the 1930’s and 1980’s had 

confirmed “[z]inc’s toxicity.” Id., at 69a. Clarot called 

Linschoten to ask whether she would be willing to participate in animal studies that Matrixx was planning, but she 

declined because her focus was human research. 

By September 2003, one of Linschoten’s colleagues at 
4 MATRIXX INITIATIVES, INC. v. SIRACUSANO 

Opinion of the Court 

the University of Colorado, Dr. Bruce Jafek, had observed

10 patients suffering from anosmia after Zicam use.

Linschoten and Jafek planned to present their findings at

a meeting of the American Rhinologic Society in a poster

presentation entitled “Zicam® Induced Anosmia.” Ibid. 

(internal quotation marks omitted). The American Rhinologic Society posted their abstract in advance of the 

meeting. The presentation described in detail a 55-yearold man with previously normal taste and smell who

experienced severe burning in his nose, followed immediately by a loss of smell, after using Zicam. It also reported 

10 other Zicam users with similar symptoms. 

Matrixx learned of the doctors’ planned presentation.

Clarot sent a letter to Dr. Jafek warning him that he did 

not have permission to use Matrixx’s name or the names 

of its products. Dr. Jafek deleted the references to Zicam 

in the poster before presenting it to the American Rhinologic Society.

The following month, two plaintiffs commenced a product liability lawsuit against Matrixx alleging that Zicam

had damaged their sense of smell. By the end of the class

period on February 6, 2004, nine plaintiffs had filed four 

lawsuits. 

Respondents allege that Matrixx made a series of public 

statements that were misleading in light of the foregoing 

information. In October 2003, after they had learned of 

Dr. Jafek’s study and after Dr. Jafek had presented his 

findings to the American Rhinologic Society, Matrixx

stated that Zicam was “‘poised for growth in the upcoming 

cough and cold season’” and that the company had “‘very 

strong momentum.’”2 Id., at 72a–74a. Matrixx further 

—————— 

2At oral argument, counsel for the United States, which submitted an 

amicus curiae brief in support of respondents, suggested that some of 

these statements might qualify as nonactionable “puffery.” Tr. of Oral 

Arg. 51–52. This question is not before us, as Matrixx has not advanced such an argument. 
Cite as: 563 U. S. ____ (2011) 5 

Opinion of the Court 

expressed its expectation that revenues would “‘be up in

excess of 50% and that earnings, per share for the full year 

[would] be in the 25 to 30 cent range.’” Id., at 74a. In 

January 2004, Matrixx raised its revenue guidance, predicting an increase in revenues of 80 percent and earnings

per share in the 33-to-38-cent range.

In its Form 10–Q filed with the SEC in November 2003, 

Zicam warned of the potential “‘material adverse effect’” 

that could result from product liability claims, “‘whether 

or not proven to be valid.’” Id., at 75a–76a. It stated that 

product liability actions could materially affect Matrixx’s

“‘product branding and goodwill,’” leading to reduced 

customer acceptance.3 Id., at 76a. It did not disclose, 

however, that two plaintiffs had already sued Matrixx for 

allegedly causing them to lose their sense of smell. 

On January 30, 2004, Dow Jones Newswires reported 

that the Food and Drug Administration (FDA) was “‘looking into complaints that an over-the-counter common-cold 

medicine manufactured by a unit of Matrixx Initiatives, 

Inc. (MTXX) may be causing some users to lose their sense 

of smell’” in light of at least three product liability lawsuits. Id., at 79a–80a. Matrixx’s stock fell from $13.55 to 

$11.97 per share after the report. In response, on February 2, Matrixx issued a press release that stated: 

“All Zicam products are manufactured and marketed according to FDA guidelines for homeopathic 

medicine. Our primary concern is the health and

safety of our customers and the distribution of factual information about our products. Matrixx believes 

statements alleging that intranasal Zicam products 

caused anosmia (loss of smell) are completely un­

—————— 

3Respondents also allege that Matrixx falsely reported its financial

results in the Form 10–Q by failing to reserve for or disclose potential

liability, in violation of Generally Accepted Accounting Principles. The 

Court of Appeals did not rely on these allegations. 
6 MATRIXX INITIATIVES, INC. v. SIRACUSANO 

Opinion of the Court 

founded and misleading. 

“In no clinical trial of intranasal zinc gluconate gel

products has there been a single report of lost or diminished olfactory function (sense of smell). Rather, 

the safety and efficacy of zinc gluconate for the treatment of symptoms related to the common cold have 

been well established in two double-blind, placebocontrolled, randomized clinical trials. In fact, in neither study were there any reports of anosmia related

to the use of this compound. The overall incidence of 

adverse events associated with zinc gluconate was extremely low, with no statistically significant difference 

between the adverse event rates for the treated and 

placebo subsets. 

“A multitude of environmental and biologic influences are known to affect the sense of smell. Chief 

among them is the common cold. As a result, the 

population most likely to use cold remedy products is

already at increased risk of developing anosmia.

Other common causes of olfactory dysfunction include 

age, nasal and sinus infections, head trauma, anatomical obstructions, and environmental irritants.” 

Id., at 77a–78a (internal quotation marks omitted). 

The day after Matrixx issued this press release, its stock 

price bounced back to $13.40 per share. 

On February 6, 2004, the end of the class period, Good

Morning America, a nationally broadcast morning news

program, highlighted Dr. Jafek’s findings. (The complaint

does not allege that Matrixx learned of the news story 

before its broadcast.) The program reported that Dr. Jafek 

had discovered more than a dozen patients suffering from

anosmia after using Zicam. It also noted that four lawsuits had been filed against Matrixx. The price of Matrixx

stock plummeted to $9.94 per share that same day. Zicam 

again issued a press release largely repeating its February 
Cite as: 563 U. S. ____ (2011) 7 

Opinion of the Court 

2 statement. 

On February 19, 2004, Matrixx filed a Form 8–K with

the SEC stating that it had “‘convened a two-day meeting 

of physicians and scientists to review current information 

on smell disorders’” in response to Dr. Jafek’s presentation. Id., at 82a. According to the Form 8–K, “‘In the 

opinion of the panel, there is insufficient scientific evidence at this time to determine if zinc gluconate, when

used as recommended, affects a person’s ability to smell.’ ” 

Ibid. A few weeks later, a reporter quoted Matrixx as

stating that it would begin conducting “‘animal and human studies to further characterize these post-marketing

complaints.’” Id., at 84a. 

On the basis of these allegations, respondents claimed 

that Matrixx violated §10(b) of the Securities Exchange

Act and SEC Rule 10b–5 by making untrue statements of 

fact and failing to disclose material facts necessary to 

make the statements not misleading in an effort to maintain artificially high prices for Matrixx securities. 

B 

Matrixx moved to dismiss respondents’ complaint, arguing that they had failed to plead the elements of a material misstatement or omission and scienter. The District 

Court granted the motion to dismiss. Relying on In re 

Carter-Wallace, Inc., Securities Litigation, 220 F. 3d 36 

(CA2 2000), it held that respondents had not alleged a

“statistically significant correlation between the use of

Zicam and anosmia so as to make failure to public[ly]

disclose complaints and the University of Colorado study a 

material omission.” App. to Pet. for Cert. 50a. The District Court similarly agreed that respondents had not 

stated with particularity facts giving rise to a strong

inference of scienter. See 15 U. S. C. A. §78u–4(b)(2)(A) 

(Feb. 2011 Supp.). It noted that the complaint failed to

allege that Matrixx disbelieved its statements about Zi­
8 MATRIXX INITIATIVES, INC. v. SIRACUSANO 

Opinion of the Court 

cam’s safety or that any of the defendants profited or 

attempted to profit from Matrixx’s public statements. 

App. to Pet. for Cert. 52a. 

The Court of Appeals reversed. 585 F. 3d 1167 (CA9 

2009). Noting that “‘[t]he determination [of materiality]

requires delicate assessments of the inferences a “reasonable shareholder” would draw from a given set of facts and 

the significance of those inferences to him,’” id., at 1178 

(quoting Basic Inc. v. Levinson, 485 U. S. 224, 236 (1988); 

some internal quotation marks omitted; alterations in 

original), the Court of Appeals held that the District Court

had erred in requiring an allegation of statistical significance to establish materiality. It concluded, to the contrary, that the complaint adequately alleged “information 

regarding the possible link between Zicam and anosmia” 

that would have been significant to a reasonable investor. 

585 F. 3d, at 1179, 1180. Turning to scienter, the Court of

Appeals concluded that “[w]ithholding reports of adverse

effects of and lawsuits concerning the product responsible

for the company’s remarkable sales increase is ‘an extreme 

departure from the standards of ordinary care,’” giving

rise to a strong inference of scienter. Id., at 1183. 

We granted certiorari, 560 U. S. ___ (2010), and we now 

affirm. 

II 

Section 10(b) of the Securities Exchange Act makes it 

unlawful for any person to “use or employ, in connection 

with the purchase or sale of any security . . . any manipulative or deceptive device or contrivance in contravention

of such rules and regulations as the Commission may

prescribe as necessary or appropriate in the public interest

or for the protection of investors.” 15 U. S. C. §78j(b). 

SEC Rule 10b–5 implements this provision by making

it unlawful to, among other things, “make any untrue 

statement of a material fact or to omit to state a material 
Cite as: 563 U. S. ____ (2011) 9 

Opinion of the Court 

fact necessary in order to make the statements made, in

the light of the circumstances under which they were 

made, not misleading.” 17 CFR §240.10b–5(b). We have 

implied a private cause of action from the text and purpose of §10(b). See Tellabs, Inc. v. Makor Issues & Rights, 

Ltd., 551 U. S. 308, 318 (2007). 

To prevail on their claim that Matrixx made material 

misrepresentations or omissions in violation of §10(b) and 

Rule 10b–5, respondents must prove “(1) a material misrepresentation or omission by the defendant; (2) scienter; 

(3) a connection between the misrepresentation or omission and the purchase or sale of a security; (4) reliance

upon the misrepresentation or omission; (5) economic loss; 

and (6) loss causation.” Stoneridge Investment Partners, 

LLC v. Scientific-Atlanta, Inc., 552 U. S. 148, 157 (2008).

Matrixx contends that respondents have failed to plead 

both the element of a material misrepresentation or omission and the element of scienter because they have not 

alleged that the reports received by Matrixx reflected

statistically significant evidence that Zicam caused anosmia. We disagree. 

A 

We first consider Matrixx’s argument that “adverse

event reports that do not reveal a statistically significant 

increased risk of adverse events from product use are not 

material information.” Brief for Petitioners 17 (capitalization omitted). 

1 

To prevail on a §10(b) claim, a plaintiff must show that 

the defendant made a statement that was “misleading as 

to a material fact.”4 Basic, 485 U. S., at 238. In Basic, we 

—————— 

4Under the Private Securities Litigation Reform Act of 1995 

(PSLRA), when a plaintiff’s claim is based on alleged misrepresentations or omissions of a material fact, “the complaint shall specify each 
10 MATRIXX INITIATIVES, INC. v. SIRACUSANO 

Opinion of the Court 

held that this materiality requirement is satisfied when

there is “‘a substantial likelihood that the disclosure of 

the omitted fact would have been viewed by the reasonable 

investor as having significantly altered the “total mix” of

information made available.’” Id., at 231–232 (quoting 

TSC Industries, Inc. v. Northway, Inc., 426 U. S. 438, 449 

(1976)). We were “careful not to set too low a standard of 

materiality,” for fear that management would “‘bury 

the shareholders in an avalanche of trivial information.’” 

485 U. S., at 231 (quoting TSC Industries, 426 U. S., at 

448–449). 

Basic involved a claim that the defendant had made 

misleading statements denying that it was engaged in 

merger negotiations when it was, in fact, conducting preliminary negotiations. See 485 U. S., at 227–229. The 

defendant urged a bright-line rule that preliminary 

merger negotiations are material only once the parties to

the negotiations reach an agreement in principle. Id., at 

232–233. We observed that “[a]ny approach that designates a single fact or occurrence as always determinative 

of an inherently fact-specific finding such as materiality,

must necessarily be overinclusive or underinclusive.” Id., 

at 236. We thus rejected the defendant’s proposed rule,

explaining that it would “artificially exclud[e] from the 

definition of materiality information concerning merger

discussions, which would otherwise be considered significant to the trading decision of a reasonable investor.” 

Ibid. 

Like the defendant in Basic, Matrixx urges us to adopt a

bright-line rule that reports of adverse events5 associated 

—————— 

statement alleged to have been misleading, [and] the reason or reasons 

why the statement is misleading.” 15 U. S. C. §78u–4(b)(1). 5The FDA defines an “[a]dverse drug experience” as “[a]ny adverse 

event associated with the use of a drug in humans, whether or not 

considered drug related.” 21 CFR §314.80(a) (2010). Federal law 

imposes certain obligations on pharmaceutical manufacturers to report 
Cite as: 563 U. S. ____ (2011) 11 

Opinion of the Court 

with a pharmaceutical company’s products cannot be 

material absent a sufficient number of such reports to 

establish a statistically significant risk that the product is

in fact causing the events.6 Absent statistical significance,

Matrixx argues, adverse event reports provide only “anecdotal” evidence that “the user of a drug experienced an 

adverse event at some point during or following the use 

of that drug.” Brief for Petitioners 17. Accordingly,

it contends, reasonable investors would not consider such 

reports relevant unless they are statistically significant

because only then do they “reflect a scientifically reliable 

basis for inferring a potential causal link between product 

use and the adverse event.” Id., at 32. 

 As in Basic, Matrixx’s categorical rule would “artificially

exclud[e]” information that “would otherwise be considered significant to the trading decision of a reasonable 

investor.” 485 U. S., at 236. Matrixx’s argument rests on 

the premise that statistical significance is the only reliable 

indication of causation. This premise is flawed: As the 

SEC points out, “medical researchers . . . consider multiple 

—————— 

adverse events to the FDA. During the class period, manufacturers of

over-the-counter drugs such as Zicam Cold Remedy had no obligation to

report adverse events to the FDA. In 2006, Congress enacted legislation to require manufacturers of over-the-counter drugs to report any 

“serious adverse event” to the FDA within 15 business days. See 21 

U. S. C. §§379aa(b), (c). 6 “A study that is statistically significant has results that are unlikely 

to be the result of random error . . . .” Federal Judicial Center, Reference Manual on Scientific Evidence 354 (2d ed. 2000). To test for 

significance, a researcher develops a “null hypothesis”—e.g., the assertion that there is no relationship between Zicam use and anosmia. See 

id., at 122. The researcher then calculates the probability of obtaining 

the observed data (or more extreme data) if the null hypothesis is true

(called the p-value). Ibid. Small p-values are evidence that the null 

hypothesis is incorrect. See ibid. Finally, the researcher compares the 

p-value to a preselected value called the significance level. Id., at 123. 

If the p-value is below the preselected value, the difference is deemed

“significant.” Id., at 124. 
12 MATRIXX INITIATIVES, INC. v. SIRACUSANO 

Opinion of the Court 

factors in assessing causation.” Brief for United States as 

Amicus Curiae 12. Statistically significant data are not 

always available. For example, when an adverse event is 

subtle or rare, “an inability to obtain a data set of appropriate quality or quantity may preclude a finding of statistical significance.” Id., at 15; see also Brief for Medical 

Researchers as Amici Curiae 11. Moreover, ethical considerations may prohibit researchers from conducting

randomized clinical trials to confirm a suspected causal

link for the purpose of obtaining statistically significant 

data. See id., at 10–11. 

A lack of statistically significant data does not mean 

that medical experts have no reliable basis for inferring a 

causal link between a drug and adverse events. As Matrixx itself concedes, medical experts rely on other evidence to establish an inference of causation. See Brief for 

Petitioners 44–45, n. 22.7 We note that courts frequently 

permit expert testimony on causation based on evidence 

other than statistical significance. See, e.g., Best v. Lowe’s 

Home Centers, Inc., 563 F. 3d 171, 178 (CA6 2009); Westberry v. Gislaved Gummi AB, 178 F. 3d 257, 263–264 (CA4 

1999) (citing cases); Wells v. Ortho Pharmaceutical Corp., 

788 F. 2d 741, 744–745 (CA11 1986). We need not consider whether the expert testimony was properly admitted 

in those cases, and we do not attempt to define here what

constitutes reliable evidence of causation. It suffices to 

—————— 

7Matrixx and its amici list as relevant factors the strength of the 

association between the drug and the adverse effects; a temporal

relationship between exposure and the adverse event; consistency 

across studies; biological plausibility; consideration of alternative 

explanations; specificity (i.e., whether the specific chemical is associated with the specific disease); the dose-response relationship; and the

clinical and pathological characteristics of the event. Brief for Petitioners 44–45, n. 22; Brief for Consumer Healthcare Products Assn. et al. as 

Amici Curiae 12–13. These factors are similar to the factors the FDA 

considers in taking action against pharmaceutical products. See infra, 

at 13–14. 
Cite as: 563 U. S. ____ (2011) 13 

Opinion of the Court 

note that, as these courts have recognized, “medical professionals and researchers do not limit the data they

consider to the results of randomized clinical trials or to 

statistically significant evidence.” Brief for Medical Researchers as Amici Curiae 31. 

The FDA similarly does not limit the evidence it considers for purposes of assessing causation and taking regulatory action to statistically significant data. In assessing 

the safety risk posed by a product, the FDA considers

factors such as “strength of the association,” “temporal

relationship of product use and the event,” “consistency of

findings across available data sources,” “evidence of a

dose-response for the effect,” “biologic plausibility,” “seriousness of the event relative to the disease being treated,”

“potential to mitigate the risk in the population,” “feasibility of further study using observational or controlled 

clinical study designs,” and “degree of benefit the product 

provides, including availability of other therapies.”8 FDA, 

Guidance for Industry: Good Pharmacovigilance Practices and Pharmacoepidemiologic Assessment 18 (2005)

(capitalization omitted), http://www.fda.gov/downloads/ 

RegulatingInformation/Guidances/UCM126834.pdf (all Internet materials as visited Mar. 17, 2011, and available in 

Clerk of Court’s case file); see also Brief for United States 

as Amicus Curiae 19–20 (same); FDA, The Clinical Impact of Adverse Event Reporting 6 (1996) (similar),

http://www.fda.gov/downloads/safety/MedWatch/UCM1685

05.pdf. It “does not apply any single metric for determining when additional inquiry or action is necessary, and it 

certainly does not insist upon ‘statistical significance.’” 

Brief for United States as Amicus Curiae 19. 

Not only does the FDA rely on a wide range of evidence 

of causation, it sometimes acts on the basis of evidence 

that suggests, but does not prove, causation. For example, 

—————— 

8See also n. 7, supra. 
14 MATRIXX INITIATIVES, INC. v. SIRACUSANO 

Opinion of the Court 

the FDA requires manufacturers of over-the-counter drugs

to revise their labeling “to include a warning as soon as

there is reasonable evidence of an association of a serious 

hazard with a drug; a causal relationship need not have 

been proved.” 21 CFR §201.80(e). More generally, the 

FDA may make regulatory decisions against drugs based 

on postmarketing evidence that gives rise to only a suspicion of causation. See FDA, The Clinical Impact of Adverse Event Reporting, supra, at 7 (“[A]chieving certain

proof of causality through postmarketing surveillance is

unusual. Attaining a prominent degree of suspicion is

much more likely, and may be considered a sufficient basis

for regulatory decisions” (footnote omitted)).9 

This case proves the point. In 2009, the FDA issued a 

warning letter to Matrixx stating that “[a] significant and

growing body of evidence substantiates that the Zicam 

Cold Remedy intranasal products may pose a serious risk 

to consumers who use them.” App. 270a. The letter cited 

as evidence 130 reports of anosmia the FDA had received, 

the fact that the FDA had received few reports of anosmia 

associated with other intranasal cold remedies, and “evidence in the published scientific literature that various

salts of zinc can damage olfactory function in animals and 

—————— 

9See also GAO, M. Crosse et al., Drug Safety: Improvement Needed

in FDA’s Postmarket Decision-making and Oversight Process 7 (GAO–

06–402, 2006) (“If FDA has information that a drug on the market may 

pose a significant health risk to consumers, it weighs the effect of the

adverse events against the benefit of the drug to determine what 

actions, if any, are warranted. This decision-making process is complex

and encompasses many factors, such as the medical importance and 

utility of the drug, the drug’s extent of usage, the severity of the

disease being treated, the drug’s efficacy in treating this disease,

and the availability of other drugs to treat the same disorder”),

http://www.gao.gov/new.items/d06402.pdf; Federal Judicial Center, 

supra n. 6, at 33 (“[R]isk assessors may pay heed to any evidence that

points to a need for caution, rather than assess the likelihood that a

causal relationship in a specific case is more likely than not”). 
Cite as: 563 U. S. ____ (2011) 15 

Opinion of the Court 

humans.” 

data. 

Ibid. It did not cite statistically significant 

Given that medical professionals and regulators act on

the basis of evidence of causation that is not statistically 

significant, it stands to reason that in certain cases reasonable investors would as well. As Matrixx acknowledges, adverse event reports “appear in many forms, 

including direct complaints by users to manufacturers, 

reports by doctors about reported or observed patient 

reactions, more detailed case reports published by doctors

in medical journals, or larger scale published clinical 

studies.” Brief for Petitioners 17. As a result, assessing 

the materiality of adverse event reports is a “fact-specific”

inquiry, Basic, 485 U. S., at 236, that requires consideration of the source, content, and context of the reports.

This is not to say that statistical significance (or the lack

thereof) is irrelevant—only that it is not dispositive of 

every case.

 Application of Basic’s “total mix” standard does not 

mean that pharmaceutical manufacturers must disclose all reports of adverse events. Adverse event reports

are daily events in the pharmaceutical industry; in

2009, the FDA entered nearly 500,000 such reports into 

its reporting system, see FDA, Reports Received and 

Reports Entered in AERS by Year (as of Mar. 31, 2010), 

http://www.fda.gov/Drugs/GuidanceComplianceRegulatory

Information/Surveillance/AdverseDrugEffects/ucm070434. 

htm. The fact that a user of a drug has suffered an

adverse event, standing alone, does not mean that 

the drug caused that event. See FDA, Annual Adverse 

Drug Experience Report: 1996, p. 2 (1997), http://drugand

devicelaw.net/Annual%20Adverse%20Drug%20Experience 

%20Report%201996.pdf. The question remains whether a 

reasonable investor would have viewed the nondisclosed 

information “‘as having significantly altered the “total 

mix” of information made available.’” Basic, 485 U. S., at 
16 MATRIXX INITIATIVES, INC. v. SIRACUSANO 

Opinion of the Court 

232 (quoting TSC Industries, 426 U. S., at 449; emphasis 

added). For the reasons just stated, the mere existence of 

reports of adverse events—which says nothing in and of 

itself about whether the drug is causing the adverse 

events—will not satisfy this standard. Something more is

needed, but that something more is not limited to statistical significance and can come from “the source, content,

and context of the reports,” supra, at 15. This contextual 

inquiry may reveal in some cases that reasonable investors would have viewed reports of adverse events as material even though the reports did not provide statistically 

significant evidence of a causal link.10 

Moreover, it bears emphasis that §10(b) and Rule 10b–

5(b) do not create an affirmative duty to disclose any and 

all material information. Disclosure is required under

these provisions only when necessary “to make . . . statements made, in the light of the circumstances under which

they were made, not misleading. 17 CFR §240.10b–5(b);

see also Basic, 485 U. S., at 239, n. 17 (“Silence, absent a

duty to disclose, is not misleading under Rule 10b–5”).

Even with respect to information that a reasonable investor might consider material, companies can control what 

they have to disclose under these provisions by controlling 

what they say to the market. 

2 

Applying Basic’s “total mix” standard in this case, we 

conclude that respondents have adequately pleaded materiality. This is not a case about a handful of anecdotal 

—————— 

10We note that our conclusion accords with views of the SEC, as expressed in an amicus curiae brief filed in this case. See Brief for United 

States as Amicus Curiae 11–12; see also TSC Industries, Inc. v. Northway, Inc., 426 U. S. 438, 449, n. 10 (1976) (“[T]he SEC’s view of the

proper balance between the need to insure adequate disclosure and the 

need to avoid the adverse consequences of setting too low a threshold 

for civil liability is entitled to consideration”). 
Cite as: 563 U. S. ____ (2011) 17 

Opinion of the Court 

reports, as Matrixx suggests. Assuming the complaint’s

allegations to be true, as we must, Matrixx received information that plausibly indicated a reliable causal link 

between Zicam and anosmia. That information included 

reports from three medical professionals and researchers

about more than 10 patients who had lost their sense of

smell after using Zicam. Clarot told Linschoten that 

Matrixx had received additional reports of anosmia. (In

addition, during the class period, nine plaintiffs commenced four product liability lawsuits against Matrixx

alleging a causal link between Zicam use and anosmia.)11 

Further, Matrixx knew that Linschoten and Dr. Jafek had 

presented their findings about a causal link between

Zicam and anosmia to a national medical conference devoted to treatment of diseases of the nose.

12 Their presentation described a patient who experienced severe burning

in his nose, followed immediately by a loss of smell, after 

using Zicam—suggesting a temporal relationship between

Zicam use and anosmia. 

Critically, both Dr. Hirsch and Linschoten had also 

drawn Matrixx’s attention to previous studies that had 

demonstrated a biological causal link between intranasal

application of zinc and anosmia.13 Before his conversation 

—————— 

11 It is unclear whether these plaintiffs were the same individuals

whose symptoms were reported by the medical professionals. 12Matrixx contends that Dr. Jafek and Linschoten’s study was not 

reliable because they did not sufficiently rule out the common cold as a

cause for their patients’ anosmia. We note that the complaint alleges

that, in one instance, a consumer who did not have a cold lost his sense 

of smell after using Zicam. More importantly, to survive a motion to 

dismiss, respondents need only allege “enough facts to state a claim to

relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 

U. S. 544, 570 (2007). For all the reasons we state in the opinion,

respondents’ allegations plausibly suggest that Dr. Jafek and Linschoten’s conclusions were based on reliable evidence of a causal link 

between Zicam and anosmia. 13Matrixx contends that these studies are not reliable evidence of 
18 MATRIXX INITIATIVES, INC. v. SIRACUSANO 

Opinion of the Court 

with Linschoten, Clarot, Matrixx’s vice president of research and development, was seemingly unaware of these 

studies, and the complaint suggests that, as of the class

period, Matrixx had not conducted any research of its own 

relating to anosmia. See, e.g., App. 84a (referencing a 

press report, issued after the end of the class period, noting that Matrixx said it would begin conducting “‘animal

and human studies to further characterize these postmarketing complaints’”). Accordingly, it can reasonably 

be inferred from the complaint that Matrixx had no basis 

for rejecting Dr. Jafek’s findings out of hand. 

We believe that these allegations suffice to “raise a

reasonable expectation that discovery will reveal evidence” 

satisfying the materiality requirement, Bell Atlantic Corp. 

v. Twombly, 550 U. S. 544, 556 (2007), and to “allo[w] the 

court to draw the reasonable inference that the defendant 

is liable for the misconduct alleged,” Iqbal, 556 U. S., at 

___ (slip op., at 14). The information provided to Matrixx

by medical experts revealed a plausible causal relationship between Zicam Cold Remedy and anosmia. Consumers likely would have viewed the risk associated with 

Zicam (possible loss of smell) as substantially outweighing 

the benefit of using the product (alleviating cold symptoms), particularly in light of the existence of many alternative products on the market. Importantly, Zicam Cold

Remedy allegedly accounted for 70 percent of Matrixx’s 

sales. Viewing the allegations of the complaint as a whole, 

—————— 

causation because the studies used zinc sulfate, whereas the active 

ingredient in Matrixx is zinc gluconate. Respondents’ complaint,

however, alleges that the studies confirmed the toxicity of “zinc.” App. 

68a. Matrixx further contends that studies relating to fish cannot

reliably prove causation with respect to humans. The complaint

references several studies, however, only one of which involved fish. In 

any event, the existence of the studies suggests a plausible biological 

link between zinc and anosmia, which, in combination with the other 

allegations, is sufficient to survive a motion to dismiss. 
Cite as: 563 U. S. ____ (2011) 19 

Opinion of the Court 

the complaint alleges facts suggesting a significant risk to 

the commercial viability of Matrixx’s leading product. 

It is substantially likely that a reasonable investor 

would have viewed this information “‘as having significantly altered the “total mix” of information made available.’” Basic, 485 U. S., at 232 (quoting TSC Industries, 

426 U. S., at 449). Matrixx told the market that revenues 

were going to rise 50 and then 80 percent. Assuming the

complaint’s allegations to be true, however, Matrixx had

information indicating a significant risk to its leading 

revenue-generating product. Matrixx also stated that 

reports indicating that Zicam caused anosmia were “‘completely unfounded and misleading’” and that “‘the safety 

and efficacy of zinc gluconate for the treatment of symptoms related to the common cold have been well established.’” App. 77a–78a. Importantly, however, Matrixx 

had evidence of a biological link between Zicam’s key 

ingredient and anosmia, and it had not conducted any 

studies of its own to disprove that link. In fact, as Matrixx 

later revealed, the scientific evidence at that time was 

“‘insufficient . . . to determine if zinc gluconate, when used 

as recommended, affects a person’s ability to smell.’” Id., 

at 82a. 

Assuming the facts to be true, these were material facts

“necessary in order to make the statements made, in the 

light of the circumstances under which they were made, 

not misleading.” 17 CFR §240.10b–5(b). We therefore 

affirm the Court of Appeals’ holding that respondents

adequately pleaded the element of a material misrepresentation or omission. 

B 

Matrixx also argues that respondents failed to allege

facts plausibly suggesting that it acted with the required

level of scienter. “To establish liability under §10(b) and 

Rule 10b–5, a private plaintiff must prove that the defen­
20 MATRIXX INITIATIVES, INC. v. SIRACUSANO 

Opinion of the Court 

dant acted with scienter, ‘a mental state embracing intent

to deceive, manipulate, or defraud.’” Tellabs, 551 U. S., at 

319 (quoting Ernst & Ernst v. Hochfelder, 425 U. S. 185, 

193–194, and n. 12 (1976)). We have not decided whether 

recklessness suffices to fulfill the scienter requirement. 

See Tellabs, 551 U. S., at 319, n. 3. Because Matrixx does 

not challenge the Court of Appeals’ holding that the 

scienter requirement may be satisfied by a showing of 

“deliberate recklessness,” see 585 F. 3d, at 1180 (internal 

quotation marks omitted), we assume, without deciding, 

that the standard applied by the Court of Appeals is sufficient to establish scienter.14 

Under the PSLRA, a plaintiff must “state with particularity facts giving rise to a strong inference that the

defendant acted with the required state of mind.” 15 

U. S. C. A. §78u–4(b)(2)(A) (Feb. 2011 Supp.). This standard requires courts to take into account “plausible opposing inferences.” Tellabs, 551 U. S., at 323. A complaint

adequately pleads scienter under the PSLRA “only if a 

reasonable person would deem the inference of scienter

cogent and at least as compelling as any opposing inference one could draw from the facts alleged.” Id., at 324. 

In making this determination, the court must review “all 

the allegations holistically.” Id., at 326. The absence of a 

motive allegation, though relevant, is not dispositive. Id., 

at 325. 

Matrixx argues, in summary fashion, that because

respondents do not allege that it knew of statistically 

significant evidence of causation, there is no basis to

consider the inference that it acted recklessly or knowingly to be at least as compelling as the alternative infer­

—————— 

14Under the PSLRA, if the alleged misstatement or omission is a 

“forward-looking statement,” the required level of scienter is “actual

knowledge.” 15 U. S. C. §78u–5(c)(1)(B). Matrixx has not argued that

the statements or omissions here are “forward-looking statement[s].” 
Cite as: 563 U. S. ____ (2011) 21 

Opinion of the Court 

ences. “Rather,” it argues, “the most obvious inference is 

that petitioners did not disclose the [reports] simply because petitioners believed they were far too few . . . to

indicate anything meaningful about adverse reactions to 

use of Zicam.” Brief for Petitioners 49. Matrixx’s proposed bright-line rule requiring an allegation of statistical

significance to establish a strong inference of scienter is

just as flawed as its approach to materiality.

The inference that Matrixx acted recklessly (or intentionally, for that matter) is at least as compelling, if not 

more compelling, than the inference that it simply thought 

the reports did not indicate anything meaningful about 

adverse reactions. According to the complaint, Matrixx

was sufficiently concerned about the information it received that it informed Linschoten that it had hired a 

consultant to review the product, asked Linschoten to 

participate in animal studies, and convened a panel of 

physicians and scientists in response to Dr. Jafek’s presentation. It successfully prevented Dr. Jafek from using 

Zicam’s name in his presentation on the ground that he 

needed Matrixx’s permission to do so. Most significantly, 

Matrixx issued a press release that suggested that studies 

had confirmed that Zicam does not cause anosmia when, 

in fact, it had not conducted any studies relating to anosmia and the scientific evidence at that time, according to 

the panel of scientists, was insufficient to determine 

whether Zicam did or did not cause anosmia.15 

—————— 

15One of Matrixx’s amici argues that “the most cogent inference regarding Matrixx’s state of mind is that it delayed releasing information 

regarding anosmia complaints in order to provide itself an opportunity

to carefully review all evidence regarding any link between Zicam and 

anosmia.” Brief for Washington Legal Foundation as Amicus Curiae 

26. We do not doubt that this may be the most cogent inference in some 

cases. Here, however, the misleading nature of Matrixx’s press release 

is sufficient to render the inference of scienter at least as compelling as

the inference suggested by amicus. 
22 MATRIXX INITIATIVES, INC. v. SIRACUSANO 

Opinion of the Court 

These allegations, “taken collectively,” give rise to a

“cogent and compelling” inference that Matrixx elected not 

to disclose the reports of adverse events not because it 

believed they were meaningless but because it understood 

their likely effect on the market. Tellabs, 551 U. S., at 

323, 324. “[A] reasonable person” would deem the inference that Matrixx acted with deliberate recklessness (or 

even intent) “at least as compelling as any opposing inference one could draw from the facts alleged.” Id., at 324. 

We conclude, in agreement with the Court of Appeals, that

respondents have adequately pleaded scienter. Whether 

respondents can ultimately prove their allegations and

establish scienter is an altogether different question. 

* * * 

For the reasons stated, the judgment of the Court of

Appeals for the Ninth Circuit is 

Affirmed.