In re: Adams Golf, Inc. Securities Litigation

In an action under the Securities Act of 1933, United States Third Circuit Judge Rendell reversed the District Court’s dismissal of plaintiff’s claims that the company’s registration statement and prospectus contained materially false and misleading statements regarding product distribution. The court held that reasonable minds could disagree as to whether the omitted fact that products were being sold by unauthorized retailers in a gray market was necessary to make the statements regarding the company’s limited distribution not misleading. It was also held that the company’s statements regarding its prompt delivery and retailers’ inventory of its products are not materially misleading.