Opinion ID: 2977235
Heading Depth: 4
Heading Rank: 1

Heading: GMAC’s Statements in its Offering Documents

Text: Plaintiffs do not have a claim regarding GMAC’s alleged misstating of GM’s performance in GMAC’s 2003 offering documents. The plaintiffs argue that by disclosing the links between GM and GMAC, GMAC was in fact “incorporating all public information about GM.” Because plaintiffs allege that some of the public information about GM at the time was in fact untrue, this incorporation would mean that GMAC had made misstatements in its offering documents. Such an allegation, however, is unfounded. Nowhere did GMAC assert that it was incorporating or vouching for GM’s publicly disclosed status. GMAC never said that it was doing so, and it seems hard to believe that GMAC could be found to have done so merely by “affix[ing] a coupon rate to its debt securities.” Id. The coupon rate only disclosed what in fact was true, which was that GMAC would pay a certain amount of interest on a particular bond. Plaintiffs continually attempt to turn what are minimal, true statements into an incorporation of all sorts of information or at least say that those statements should have incorporated all that information. The problem, however, is that securities laws are clear. They mandate disclosure of certain things in the registration statement, 15 U.S.C. § 77k(a), and then they allow the company to remain silent regarding other matters if it so chooses. If it in fact chooses to speak, then it must make sure that what it says does not mislead investors into believing something that is untrue. 15 U.S.C. §§ 77k(a), 77l(a)(2). Plaintiffs cannot, however, turn the silence that the securities laws permit into liability. See Basic Inc. v. Levinson, 485 U.S. 224, 239 n.17 (1988); see also Mayer v. Mylod, 988 F.2d 635, 639 (6th Cir. 1993).