The PSLRA will allow defendants to escape liability for false projections if those projections are accompanied by “meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the forward-looking statement.” 15 U.S.C. § 78u-5(c).  Additionally, even outside the context of projection statements, warnings and disclaimers may be sufficient to render otherwise-misleading statements not “false” for securities law purposes.  See Omnicare v. Laborers District Council Construction Industry Pension Fund, 575 U.S. 175 (2015).  Yet, as I’ve previously blogged, courts often treat fairly meaningless verbiage as though it conveyed critical information.

The most recent example is Steamship Trade v. Olo, 2023 WL 4744197 (SDNY July 25, 2023).  Olo is a publicly traded company that provides software to restaurants. One of those was the Subway chain. At a time when Olo allegedly knew (but did not disclose) that Subway intended to terminate its contract, Olo’s officers made a bunch of projections of future growth, to wit:

Throughout 2022, we believe the main drivers of revenue growth will be ARPU expansion as well as increasing the number of active locations on the platform….

And for 2022, again, we’re targeting a similar number of net adds as we achieved in 2021. …

[W]hen we look at all those different avenues, more locations, more transactions per location and more revenue per transaction, there’s just a lot of levers that we can pull in order to maintain [a 30%] growth rate.

The court held that there were no misleading omissions because Olo’s projections were accompanied by a statement that:

there can be no assurance that we will be able to retain these customers or acquire new customers, deploy additional modules to these customers, or continue to increase the volume of transactions on our platform.

This is what the court calls meaningful. I defy anyone to explain what this could possibly communicate to an investing audience that they would not already know.  Of course clients might leave; would investors have otherwise assumed they were locked in a cage in Olo’s basement?  What possible work could these “warnings” have done that would have educated the listener?

Anyway, as I said before, it strikes me that courts are awfully skeptical of “generic” statements when plaintiffs use them for the basis of a claim (made clear most recently in the Goldman case, which I blogged about last week) but very quick to treat them as conveying meaningful information when defendants use them to fend off one.