Material

Definition:

The fundamental concept in securities laws relating to disclosure of material events or facts. A misstated or omitted fact is material if there is “a substantial likelihood that a reasonable shareholder would consider it important in deciding how to vote or invest” (TSC v. Northway, U.S. Supreme Court, 1976). If “the fact would have been viewed by the reasonable investor as having significantly altered the ‘total mix’ of information available,” then it is material (Id.). The determination of materiality is fact specific. Whether a fact is material and whether the fact would be important to a reasonable shareholder or investor in making a voting or investment decision are specific to the circumstances of the case.

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