The U.S. Supreme Court found that allegations of "statistical significance" were not a requirement for pleading materiality in a securities fraud action arising from a pharmaceutical company's alleged failure to disclose reports linking its cold remedy with loss of smell.

Plaintiff-shareholders alleged in the complaint that statements made by defendant Matrixx relating to revenues and product safety were misleading in light of reports that Matrixx had received, but did not disclose, concerning consumers who had lost their sense of smell after using Matrixx's Zicam cold remedy. Matrixx moved to dismiss the complaint, arguing, among other things, that plaintiff had failed to plead the elements of a material misstatement.