PMI Prevails in Investors’ Suit

A U.S. appeals court on Dec. 26 dismissed a securities fraud class action brought by shareholders against Philip Morris International, reports Bloomberg Law.

Investors accused the tobacco manufacturer of misleading them about the methods and results of IQOS clinical studies presented to the U.S. Food and Drug Administration. PMI sought the approval so that its former parent company, Altria Group, could sell the device within the U.S.

Investors also targeted company statements about projected IQOS sales in Japan, the only country at that time where PMI sold the line of products nationwide.

The U.S. Court of Appeals for the Second Circuit ruled that statements by PMI and its executives that the IQOS studies were “rigorous,” “the best science,” and “very advanced” were inactionable puffery. The court rejected the investors’ argument that such statements could be proven true or false.

Optimistic remarks about sales performance in Japan, meanwhile, were allowable forward-looking statements, the court ruled.