AmEx had no duty to update investors about contract negotiations

By Anne Sherry, J.D. The Second Circuit agreed with a district court that American Express did not violate the securities laws by making—or failing to update—certain statements about its relationship with Costco. After AmEx ended its co-branding agreement with Costco Canada, AmEx’s CFO spoke about the company’s relationship in the United States, which the plaintiffs took as reassurance with a “forward intent.” The court found that the statements were not forward-looking and were strictly true, so there was no duty to update when the U.S. renewal negotiations deteriorated (Pipefitters Union Local 537 Pension Fund v. American Express Company, May 8, 2019, per curiam). AmEx had separate co-branding agreements with Costco Canada and Costco United States. The company announced in September 2014 that it would not renew its agreement with Costco Canada. At the time of the announcement, an AmEx representative told a news outlet that the decision…

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