C. Clyde Atkins

“ And even assuming the Partnership had superior access to such information, the prospectus' failure to compare the Taj Mahal's debt-equity ratio with that of other casinos does not, by itself, create an actionable claim.
The federal securities laws do not ordain that the issuer of a security compare itself in myriad ways to its competitors, whether favorably or unfavorably, for at least three reasons. ”

“ In a word, a misrepresentation or omission is actionable when materially misleading.
This reading of Virginia Bankshares just restates what what we explained above, namely, that materiality involves a context-specific analysis such that warnings and cautionary language will sometimes suffice to render the allegedly misleading misrepresentations or omissions immaterial as a matter of law. ”

“ As the statement quoted immediately above implies, materiality is a relative concept, so that a court must appraise a misrepresentation or omission in the complete context in which the author conveys it. ”

“ The district court dismissed the securities law claims under Fed.R.Civ.P. 12 (b) (6) for failure to state a claim upon which relief can be granted. The linchpin of the district court's decision was what has been described as the "bespeaks caution" doctrine, according to which a court may determine that the inclusion of sufficient cautionary statements in a prospectus renders misrepresentations and omissions contained therein nonactionable. ”

“ Shapiro, 964 F.2d at 280 n. 11, "if the alleged misrepresentations or omissions are so obviously unimportant to an investor that reasonable minds cannot differ on the question of materiality [it is] appropriate for the district court to rule that the allegations are inactionable as a matter of law." Shapiro, 964 F.2d at 280 & n. ”

“ See In re Donald J. Trump Casino Sec. Litig., 793 F.Supp. 543 (D.N.J.1992) . The district court also rejected the plaintiffs' motion to amend their complaints to add allegations based on an appraisal of the future value of the Taj Mahal which had been issued by the accounting firm of Laventhol and Horwath ("the Laventhol Report") . The district court did not reach the defendants' motion to dismiss based on Rule 9 (b) . ”

“ More specifically, we believe that due to the disclaimers and warnings the prospectus contains, no reasonable investor could believe anything but that the Taj Mahal bonds represented a rather risky, speculative investment which might yield a high rate of return, but which alternatively might result in no return or even a loss. ”

“ The district court declined to do so ... and plaintiffs do not challenge that decision here.... Plaintiffs do not now ask this Court to consider the prescience of the Laventhol Report or to consider the omission of any mention of this report from the Prospectus." Brief for Appellants at 10-11 n. 8 (emphasis added) . Nevertheless, in their reply brief and at oral argument plaintiffs advanced arguments premised on the Laventhol Report. It is well-established that, " [a] s a general matter, the courts of appeals will not consider arguments raised on appeal for the first time in a reply brief." ”

“ Second, and more importantly, by recognizing that an accompanying statement may neutralize the effect of a misleading statement, the Court impliedly accepted the logic of the bespeaks caution doctrine. Id. at ----, 111 S.Ct. at 2760. The Court explained:
While a misleading statement will not always lose its deceptive edge simply by joinder with others that are true, the true statements may discredit the other one so obviously that the risk of real deception drops to nil. Since liability under § 14 (a) must rest not only on deceptiveness but materiality as well [,] ... ”

“ The Court further held that the specific statement at issue in the case was a proper basis for liability under § 14 (a) because the minority shareholders reasonably understood it to rest on a factual basis. See --- U.S. at ----, 111 S.Ct. at 2758-60.
In addition, the Court in Virginia Bankshares reached two conclusions directly relevant to the case at bar. First, the Court held that a speaker's subjective disbelief or motivation, standing alone, would be inadequate to state a claim under § 14 (a) . ”