By positing your hypothetical, I guess you’ve just conceded that the 4 day rule doesn’t apply. First of all, your premise the answer with “knew”.... past tense. If the KNEW, they “failed”, that’s one thing. But this is not an examination. It’s a complex amount of data. Putting out a statement that they failed without understanding the data, is irresponsible and they have time to review it.
Now did I make the argument that they never need to disclose? No, that was not my argument. But, because it is not in the mandated table of disclosures, they need to exercise their business judgment.
I have said all along that they can be sued for fraud for inaccurate statements or omissions where for instance if the FDA has TOLD them that x would be unapprovable, for instance. But those are fact driven situations that we do not know in this instance. Moreover, it’s not an automatic deadline, with a date, it is driven by their judgment or lack thereof, which can result in regulatory issues, but again, it depends on the circumstances. And what might look approvable might it might not be approvable. There is a certain assumption that we’re all talking about the same thing when we say “bad” result or “good” result and that is again, a matter of judgment and a matter for management to determine, once they’ve reviewed all the data.
Another issue is, have they kept everything, as a general rule, quite confidential and are they generally silent about data. Yes, they have been.
So, given what we know, from blind data, the question you asked is a bit absurd. Plus you assumed the answer by the way you phrased the question. We do not know what is in the data, until we know. Bad or good, there will be no certainty until it is both disclosed and also digested. If, for instance, they got back a muddled result, they not only have the necessity but the duty to review it and characterize it as best as they can in their statements, without misstatements or omissions that can be misunderstood, or they can create all kinds of potential liability. Such a statement or publication would need to be properly reviewed and if they are doing their job to make that happen, which I presume they are, then whatever the result, regardless if someone sues later, they probably are entitled to use of the business judgment rule and, depending on facts and circumstances, the plaintiffs will either lose or have a less than satisfying settlement.
The ironic twist is you put it two months back. Did I say that they have many months to review? No, I said the 4 day rule does not apply. Period. I said general fraud issues do apply, but that is a complex mess of case law, state and federal issues that are not necessarily one way or the other, it depends upon the facts.
If the 4 day rule does not apply, per your question, then the issue is fraudulent statements and incorrect statements. But they are being silent. Have they disclosed improperly to any persons? If not, then that avoids Regulation FD.
In the end, they need to be confident enough that any statement they make is not either incorrect in totality or partially. They do not have to necessarily know every aspect of the data, but that is up to them to decide and if they get sued, then that is a risk.
But the 4 day rule and a specific regulatory deadline does not apply, absent facts that might create one, like a Reg FD issue.
We’re not arguing about NEVER having to disclose. This is why your original point was not correct and why the axiom, “if results were bad”, we would necessarily know already, is inaccurate. No one should use the 4 day rule as as an axiom for biotech investments. The reality is, results can be complicated. They can be characterized as “good” or “bad” later by the market, but they have to manage a complex disclosure process accurately and carefully. It’s not about just releasing the data, and there is no guaranty they have “good data” because they have not said anything. And I’m not talking about failing or not failing on endpoints. All of it is fact specific, not regulation specific. People are going from “bad results” to “total failure” to make this bogus argument.
Most likely what they are looking at is positive, I believe, because of the BLIND data, not a legal rule. The messy, nonsense that constantly gets put out by people to justify their belief, is thus just noise. It is inconsequential nonsense that people are using to justify an opinion that, for whatever reason, they think needs bolstering with a bogus axiom.
As I have said all along, the longer time goes, yes, it is MAYBE a somewhat positive indicator, but that is an assumption and it does not stem from the 4 day disclosure rule and it is not a given. Period.
The fact that you’re so lose with the rules and then come back to a generic duty to disclose to pretend you won a point, based upon an unlikely scenario, I think shows you’re playing games at this point with the law. And I presume you’re not a lawyer to be doing so.
No one should use the legal system, to justify a factual investment conclusion, as if it is a certainty, in an inherently ambiguous circumstance. It’s bad logic, it’s not correct, and it, misconstrues the law and necessarily creates hypotheticals that might not fit the actual, factual, circumstances. It’s not rational.
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