Opinion ID: 571326
Heading Depth: 3
Heading Rank: 3

Heading: Disclosures Regarding Workslate

Text: 71 The plaintiffs next insist, as they did regarding NGEN, that the defendants' risk disclosures were too general and were misleading given the known delays and mechanization problems that existed with Workslate. We disagree. 72 The March and August Prospectuses provided more than generalized statements of risk. For example, the August Prospectus warned: (1) For [Workslate], risks also include the implementation of advanced manufacturing processes and the development and management of retail distribution channels; (2) The successful volume production and sale of [Workslate] will be dependent upon the timely availability of several advanced components (some of which have not been manufactured by their suppliers in volume to date), the implementation of the Company of advanced manufacturing processes ... and the development and management by the Company of retail channels of distribution, an area in which the Company has no prior experience; (3) The Company has not manufactured its new products in volume.... All of the Company's products use new components based on advanced technology. Many of these new components have yet to be manufactured in volume by their suppliers. The Company's ability to manufacture these products may be adversely affected by the inability of the Company's vendors to supply high quality components in adequate quantities; (4) In light of the complex nature of the manufacturing process of its new products, the Company may experience unanticipated problems in their manufacture. One of these, [Workslate], will use advanced manufacturing processes which have not to date been widely used in the United States. 73 The plaintiffs argue that apart from the foregoing, the defendants were obliged to release information as it became known to them. That is, the plaintiffs contend Convergent had a duty to disclose the progress of its efforts to implement a new mechanization structure. We reject this argument. 74 A company need not detail every corporate event, current or prospective ... Marx v. Computer Sciences Corp., 507 F.2d 485, 491 (9th Cir.1974). The securities laws do not require management to bury the shareholders in an avalanche of trivial information--a result that is hardly conducive to informed decisionmaking. TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438, 448-49, 96 S.Ct. 2126, 2132, 48 L.Ed.2d 757 (1976).B. Underwriter Liability for Alleged Misstatements in the Research Reports 75 As to the underwriters, the plaintiffs contend the district court erred when it determined their research reports unquestionably have a sufficient factual and/or historical basis so that Rule 10b-5 liability cannot be imposed on the underwriters. In re Convergent Technologies, 721 F.Supp. at 1139. The plaintiffs apparently concede that liability would not attach if the research reports were supported by a sufficient historical or factual basis. See Meier v. Texas Int'l Drilling Funds, Inc., 441 F.Supp. 1056, 1063 (N.D.Cal.1977). They also apparently concede that, barring any additional knowledge, an analyst could reasonably support an optimistic report concerning Convergent's future on the company's history of success. See Convergent Technologies, 721 F.Supp. at 1139. 76 The plaintiffs provide no evidence, aside from pure supposition, to support their contention that the underwriter defendants knew of additional facts they failed to reveal in their research reports. The district court correctly granted the underwriters' motion for summary judgment. C. The Section 11 Claim 77 Plaintiffs finally argue the district court erred when it determined they failed to institute their section 11 suit before the expiration of the applicable statute of limitations. We need not address this contention. No liability can attach under section 11 unless a prospectus contains an untrue statement of a material fact or [omits] to state a material fact required to be stated therein or necessary to make the statements therein not misleading.... 15 U.S.C. § 77k(a) (1988). As we have previously stated, no misleading statements or material omissions exist. 78 AFFIRMED.