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8  GOLDMAN SACHS GROUP, INC. v. ARKANSAS TEACHER 

RETIREMENT SYSTEM 
Opinion of the Court 

The generic nature of  a misrepresentation often will be
important evidence of a lack of price impact, particularly in
cases  proceeding  under  the  inflation-maintenance  theory.
Under that theory, price impact is the amount of price in-
flation  maintained  by  an  alleged  misrepresentation—in
other words, the amount that the stock’s price would have
fallen “without the false statement.”  Glickenhaus & Co. v. 
Household Int’l, Inc., 787 F. 3d 408, 415 (CA7 2020).  Plain-
tiffs typically try to prove the amount of inflation indirectly:
They point to a negative disclosure about a company and an 
associated drop in its stock price; allege that the disclosure
corrected an earlier misrepresentation; and then claim that
the  price  drop  is  equal  to  the  amount  of  inflation  main-
tained  by  the  earlier  misrepresentation.    See,  e.g.,  id.,  at 
413–417;  In re  Vivendi,  S. A.  Securities  Litig.,  838  F. 3d 
223, 233–237, 253–259 (CA2 2016).

But  that  final  inference—that  the  back-end  price  drop 
equals  front-end  inflation—starts  to  break  down  when 
there is a mismatch between the contents of the misrepre-
sentation  and  the  corrective  disclosure.    That  may  occur
when  the  earlier  misrepresentation  is  generic  (e.g.,  “we 
have faith in our business model”) and the later corrective
disclosure is specific (e.g., “our fourth quarter earnings did 
not meet expectations”).  Under those circumstances, it is 
less likely that the specific disclosure actually corrected the 
generic misrepresentation, which means that there is less
reason to infer front-end price inflation—that is, price im-
pact—from the back-end price drop. 

2 

The parties do not dispute any of this.  They disagree only 
about whether the Second Circuit properly considered the
generic  nature  of  Goldman’s  alleged  misrepresentations. 

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materiality.”  Id., at 609.