Third Circuit disposition — 24-1118

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_______________
No. 24-1118
_______________
In re: Maiden Holdings, Ltd. Securities Litigation
BOILERMAKER BLACKSMITH NATIONAL
PENSION TRUST;
TAISHIN INTERNATIONAL BANK CO. LTD.,
Appellants
_______________
On Appeal from the United States District Court
for the District of New Jersey
(D.C. No. 1:19-cv-05296 & 1:19-cv-08105)
District Judge: Honorable Christine P. O’Hearn
_______________
Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
October 29, 2024
_______________
Before: CHAGARES, Chief Judge, PORTER and CHUNG,
Circuit Judges
(Filed: August 20, 2025)

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Laurence M. Rosen
Daniel I. Tyre-Karp
The Rosen Law Firm
275 Madison Avenue, 40th Floor
New York, NY 10016
Jacob A. Goldberg
The Rosen Law Firm
101 Greenwood Avenue, Suite 440
Jenkintown, PA 19046
Steven F. Hubachek
Tor Gronborg
Trig R. Smith
Harini P. Raghupathi
Robbins Geller Rudman & Dowd
655 W Broadway, Suite 1900
San Diego, CA 92101
Counsel for Appellants
Michael B. Carlinsky
Sanford I. Weisburst
Jesse Bernstein
Jacob J. Waldman
Leigha Empson
Quinn Emanuel Urquhart & Sullivan
295 5th Avenue, 9th Floor
New York, NY 10016
Kevin H. Marino
John D. Tortorella
Marino Tortorella & Boyle

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437 Southern Boulevard
Chatham, NJ 07928
Counsel for Appellees
_______________
OPINION OF THE COURT
_______________
CHAGARES, Chief Judge.
Maiden Holdings, Ltd. (“Maiden”) is a reinsurance
company whose common stock is publicly traded on the
NASDAQ stock exchange. Over the course of roughly two
years, adverse developments with Maiden’s biggest client
required Maiden to pay out claims in greater amounts than it
had budgeted for, causing it to lose hundreds of millions of
dollars while its stock price dropped more than 80%. Plaintiff-
appellants Boilermaker Blacksmith National Pension Trust and
Taishin International Bank Co. Ltd. (collectively,
“Boilermaker”), representing a class of Maiden common stock
owners, filed a lawsuit claiming that Maiden committed
securities fraud. Boilermaker asserted that Maiden’s
announcements of the reserve funds it set aside to pay out
future claims were misleading because Maiden omitted
historical data suggesting that those reserves were deficient.
The District Court, after denying Boilermaker’s
requests for discovery into the historical data Maiden had
access to, granted summary judgment in favor of Maiden. The
District Court held that Maiden’s reserve announcements were

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not misleading as a matter of law because (1) there was no
dispute that Maiden knew of and considered the undisclosed
historical data, and (2) the withheld data did not “totally
eclipse” other considerations that informed Maiden’s predicted
losses. Joint Appendix (“J.A.”) 18–19. Boilermaker now
appeals the District Court’s discovery and summary judgment
rulings.
We conclude that the District Court erred in granting
summary judgment. In its decision in Omnicare, Inc. v.
Laborers District Council Construction Industries Pension
Fund, 575 U.S. 175, 188 (2015), the Supreme Court explained
that a securities issuer’s statement of opinion is “misleadingly
incomplete” and thus unlawful if the speaker omits known
material facts about his “basis for holding that view.” Whether
withheld information is material depends on its relative
importance to the challenged opinion. Proving the materiality
of one piece of data may therefore be difficult if the opinion
was “based on a variety of complex assumptions and
considerations.” City of Warren Police & Fire Ret. Sys. v.
Prudential Fin., Inc., 70 F.4th 668, 684 (3d Cir. 2023). But
materiality is an issue that “always depends on context,”
Omnicare, 575 U.S. at 190, and we conclude that the District
Court misapplied this context-sensitive framework by holding
Boilermaker to a higher standard of materiality than the law
requires and denying it the opportunity to conduct discovery
afforded by the Federal Rules of Civil Procedure. We will
vacate the judgment of the District Court.
I.
A.

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Reinsurance is the business of insuring insurance
companies. Therefore, just like any other insurance company,
reinsurers have to set aside funds to pay out future claims.
These set-aside funds, known as “loss reserves,” are the
product of “an insurer’s actuarial judgment” and are generally
calculated based on many factors. Prudential, 70 F.4th at 684.
Because reserves represent predicted losses, they are
effectively removed from an insurer’s operating income and
treated as liabilities in financial reports. A company that sets
its loss reserves too low effectively understates its liabilities,
thus inflating its perceived financial strength.
Loss ratios are one input that actuaries often consider
when setting reserves. These ratios are expressed as
percentages that capture losses incurred from claims paid out
to policyholders relative to revenue earned from premiums.
Loss ratios are generally tracked by accident year (“AY”),
which is the twelve-month period in which a claim was filed.
Because it can take multiple years to pay out or settle any given
claim, the loss ratio for an AY can change over time. For
example, if, in the year 2025, an insurance company collects a
$50 premium, receives a claim, and pays out $25 on that claim,
then the loss ratio for AY 2025 would be 50%. If, two years
later, the company must pay an additional $10 on that same
claim, the loss ratio for AY 2025 would increase to 70%.
Tracking historical loss ratios enables insurance companies to
monitor trends of “adverse” or “favorable development[s]” and
determine the ultimate cost of prior AYs. J.A. 3576. This
historical data can help inform what loss ratio estimate (or
“loss ratio pick”) should be used to set loss reserves.
Maiden, the reinsurer at the center of this dispute, had

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only two reportable operating segments.1 The larger of the two
was Maiden’s coverage of AmTrust Financial Services, Inc.
(“AmTrust”), which grew to represent more than 70% of
Maiden’s net premiums earned. Pursuant to its reinsurance
agreement, AmTrust ceded a portion of its premiums to
Maiden, who in turn was obligated to compensate AmTrust for
a portion of the claims paid by AmTrust to its customers.
Maiden also paid AmTrust an additional 31% commission of
the premiums Maiden received from AmTrust, which meant
the reinsurance agreement would become unprofitable for
Maiden if loss ratios for the AmTrust segment reached or
exceeded roughly 69%.
Maiden employed a team of actuaries to estimate its loss
reserve needs. This team analyzed many variables, such as
historical data, actuarial and statistical projections, and
potential economic, legislative, and social changes. Maiden
provided details about its loss reserve process in publicly filed
Securities Exchange Commission (“SEC”) disclosure forms.
Recognizing the inherent complexity of these predictive
judgments, Maiden advised investors in these disclosures that
loss reserves “do not represent an exact calculation of liability”
1 The Financial Accounting Standards Board defines an
“operating segment” as “a component of a public entity” that
yields recognizable revenues and expenses, whose operations
are reviewed by the public entity’s “chief operating decision
maker,” and which has “discrete financial information”
available. Fin. Acct. Standards Bd., Accounting Standards
Codification (“ASC”) 280-10-50-1 (available at https://asc.fas
b.org/1943274/2147482810). Accounting standards provide
that public entities must report operating segments that meet or
exceed certain financial thresholds. ASC 280-10-50-10.

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and that actual losses could deviate from Maiden’s estimates.
J.A. 162. Maiden further stated that there is no “precise
method” to evaluate “the impact of any specific factor on the
adequacy of reserves.” Id. But Maiden also advised its
investors of its assumption “that past experience . . . is an
appropriate basis for predicting future events” and that
“historic loss development and trend experience is assumed to
be indicative of future loss development and trends.” J.A. 162,
199. Maiden repeatedly informed investors that this
experience-driven premise was in fact one of the “most
significant assumptions used . . . to estimate the reserve for
loss” because of the relative weight of historical data in
Maiden’s “determination of initial expected loss ratios and
expected loss reporting patterns.” J.A. 199.
Historical loss development for Maiden’s AmTrust
business indicated that losses increased over time. At the end
of 2012, the loss ratios for AY 2008 through AY 2012 ranged
from 48.6% to 71.7%. Over the next two years, those loss
ratios shot up to 69.2% to 78.5%. Losses for these AYs
continued increasing through year-end 2017, reaching a range
of 75.1% to 82.2%. By that time, loss ratios for four of the five
most recent AYs had already surpassed 60% as well.2
Notwithstanding these historical trends, Maiden consistently
relied on loss ratio picks between 50% and 60%, resulting in
reserve amounts that were hundreds of millions of dollars less
than the loss estimates recommended by Maiden’s actuaries.
Across its SEC forms, earnings conference calls, and press
releases between February 2014 and November 2018 (the
“class period”), Maiden discussed its loss reserves, financial
2 The only exception was AY 2016, which obtained a loss ratio
of 59.6% by year-end 2017.

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performance, and the profitability of its AmTrust segment. But
Maiden did not disclose the several AYs with loss ratios
exceeding the 69% profitability threshold when announcing
loss reserves based on 50-to-60% loss ratio picks.
Maiden’s loss ratio picks and corresponding loss
reserves proved inadequate. From 2017 through 2018, Maiden
experienced “significant adverse loss development within [its]
AmTrust Reinsurance segment,” was forced to increase its
deficient loss reserves, and lost hundreds of millions of dollars
as a result. J.A. 2951; see J.A. 2950, 2902. After this period
of “loss reserve strengthening and adverse prior year
development of loss reserves,” Maiden could offer “no
assurance that [it] w[ould] return to profitability.” J.A. 2902.
The price of Maiden’s common stock plummeted from $16.50
per share in February 2017 to less than $2.50 per share in
November 2018. Before the stock price dropped, Maiden
executives collected millions of dollars by selling several
thousands of shares of common stock at an average price range
of $13.50 to $16.40 per share.
B.
Boilermaker filed a lawsuit in the United States District
Court for the District of New Jersey against Maiden and three
of its executives. Boilermaker first claimed that Maiden and
its executives violated section 10(b) of the Securities Exchange
Act of 1934 (the “Exchange Act”), 15 U.S.C. § 78j(b), and
SEC Rule 10b-5, 17 C.F.R. § 240.10b-5, by making unlawfully
misleading statements about its loss reserves. Boilermaker
alleged that Maiden’s reserve announcements were misleading
due to the omission of material information regarding adverse
developments in the AmTrust book of business, of which

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Maiden knew, and which contradicted Maiden’s “artificially
low loss ratio assumptions.” J.A. 3760. Boilermaker also
claimed that Maiden and its executives were jointly and
severally liable under section 20(a) of the Exchange Act,
15 U.S.C. § 78t(a).
Maiden moved to dismiss Boilermaker’s operative
amended complaint, and the District Court denied the motion
in part. The District Court instructed Boilermaker to file a
second amended complaint to “eliminate[] surplusage,” but
otherwise held that discovery was necessary to test
Boilermaker’s theory of liability that Maiden “should have
disclosed the historical loss ratios of the AmTrust book of
business” because this information constituted “material,
adverse historical data of which [Maiden] had actual
knowledge.” J.A. 85, 97. The District Court then ordered
“limited discovery” that would be followed by “[d]ispositive
motions.” J.A. 3549–50. The District Court ruled that the
discovery during this period would be limited to Boilermaker’s
“sole claim against Maiden,” focusing on the following
question: “was there an intentional decision made by the
Defendants to omit AmTrust’s historical loss ratio information
from the view of investors?” J.A. 97–98.
Boilermaker requested that Maiden produce documents
to confirm whether its historical AmTrust loss ratios reached
the 70% to 80% figures alleged and whether Maiden knew or
had access to this information when it used loss ratio picks of
50% to 60% to set loss reserves. After Maiden disclosed some
of the actuarial analyses relevant to its loss reserve
calculations, Boilermaker argued to the Magistrate Judge that
Maiden had not produced the documents necessary “to identify
the historical loss ratios the defendant[s] had at the time they

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made their statements or the underlying data that would allow
[Boilermaker] to calculate those.” J.A. 45. Maiden objected
to Boilermaker’s requests as beyond the scope of discovery. In
Maiden’s view, the District Court had limited discovery to “a
single, simple question, whether [Maiden] considered
historical loss ratios as part of [its] analysis.” J.A. 59.
Boilermaker resisted that characterization of discovery,
highlighting that Boilermaker itself had alleged from the start
of the litigation “that defendants knew and had access to the
historical data.” J.A. 65. The relevant questions that remained,
according to Boilermaker, were whether the historical loss
ratios were as severe as alleged and whether that data was
available to Maiden during the class period.
The Magistrate Judge did not grant Boilermaker the
discovery it sought. She concluded that Maiden’s disclosure
of at least some historical loss information was satisfactory
because it “indicate[d] that [Maiden] did consider this
information.” J.A. 66. In response to Boilermaker’s request
for the “underlying data” related to Maiden’s calculation and
consideration of historical loss ratios, the Magistrate Judge
emphasized that there was no need “to get into an entire
discovery process” because the District Court did not order
“typical discovery under the rules.” J.A. 3497, 3501. This first
phase of discovery was “simply for the purpose of determining
whether . . . the defendants’ [renewed] motion to dismiss
should be granted.” J.A. 3501–02. Thus, according to the
Magistrate Judge, Boilermaker’s “request to receive all the loss
ratio [data amounted] to second-guessing the conclusions made
by [Maiden]” and contravened the District Court’s limited
discovery order. J.A. 66.
Boilermaker appealed the Magistrate Judge’s ruling to

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the District Court, and the District Court denied the appeal as
untimely under Federal Rule of Civil Procedure 72(a).
Boilermaker filed a motion for reconsideration, which the
District Court denied as well. The District Court reaffirmed its
conclusion that the appeal was untimely and held that, even if
the appeal were timely, there was “no clear error or an abuse
of discretion” by the Magistrate Judge. J.A. 30.
At the close of limited discovery, Maiden moved for
dismissal or, in the alternative, summary judgment, and
Boilermaker filed a motion under Federal Rule of Civil
Procedure 56(d) to deny or defer summary judgment pending
further discovery. The District Court denied Boilermaker’s
Rule 56(d) motion and granted summary judgment to Maiden.
The District Court concluded that Maiden’s omission of
historical data was immaterial because the record did not
support “Plaintiffs’ allegation that Maiden did not consider any
of this material in setting loss reserves.” J.A. 18. It further
explained that the historical loss ratios were “only one of many
factors” and would not “totally ‘eclipse the balance of the
numerous other considerations used to set reserves’ if revealed
to investors.” J.A. 19 (quoting Prudential, 70 F.4th at 687).
The District Court therefore held that Maiden’s statements
were not misleading as a matter of law, which defeated
Boilermaker’s section 10(b) and Rule 10b-5 claim as well as
its “derivative” section 20(a) claim. J.A. 20.
Boilermaker timely appealed.

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II.3
We review the District Court’s order granting summary
judgment to Maiden and its executives de novo and “apply the
same test the District Court should have used.” In re Processed
Egg Prods. Antitrust Litig., 881 F.3d 262, 267–68 (3d Cir.
2018) (quoting Howard Hess Dental Lab’ys Inc. v. Dentsply
Int’l, Inc., 602 F.3d 237, 246 (3d Cir. 2010)). We evaluate the
record in the light most favorable to Boilermaker and draw all
inferences in its favor. Id. at 268. We do not “weigh the
evidence or make credibility determinations” because those
tasks are properly left to the factfinder. Pichler v. UNITE,
542 F.3d 380, 386 (3d Cir. 2008). And we “may affirm based
on any ground supported by the record.” Watters v. Bd. of Sch.
Dirs. of City of Scranton, 975 F.3d 406, 412 (3d Cir. 2020)
(quotation marks omitted).
III.
Boilermaker argues that several of the District Court’s
orders were the product of one legal error: misapplication of
the legal framework governing Boilermaker’s misleading-by-
omission theory of liability. Boilermaker claims that this error
taints the District Court’s limitations on the scope of discovery,
the denial of Boilermaker’s Rule 56(d) motion, and the entry
of summary judgment for Maiden on all claims. Maiden
counters that the District Court properly applied the Supreme
Court’s and this Court’s securities fraud precedent, that
Boilermaker failed to preserve its discovery objections, and
3 The District Court had jurisdiction over this action under
15 U.S.C. § 78aa and 28 U.S.C. § 1331. This Court has
jurisdiction over this appeal under 28 U.S.C. § 1291.

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that the record contains no triable issue of fact as to materiality
or scienter. We will begin by clarifying the law governing
Boilermaker’s misleading-by-omission claim and then address
the merits of summary judgment on the current record.
A.
Section 10(b) of the Exchange Act provides that
securities issuers may not use “any manipulative or deceptive
device or contrivance in contravention of such rules and
regulations as the [SEC] may prescribe as necessary or
appropriate in the public interest or for the protection of
investors.” 15 U.S.C. § 78j(b). The SEC regulation known as
Rule 10b-5, in turn, provides that it is unlawful for an issuer
“[t]o make any untrue statement of a material fact or to omit to
state a material fact necessary in order to make statements
made, in light of the circumstances under which they were
made, not misleading.” 17 C.F.R. § 240.10b-5(b). In other
words, Rule 10b-5 “requires disclosure of information
necessary to ensure that statements . . . are clear and
complete.” Macquarie Infrastructure Corp. v. Moab Partners,
L.P., 601 U.S. 257, 264 (2024).
While statements of opinion “convey some lack of
certainty as to the statement’s content,” they can still mislead
investors if the speaker leaves out key information. Omnicare,
575 U.S. at 187.4 “[A] reasonable investor may, depending on
4 The Supreme Court’s Omnicare decision addressed claims
arising under a different securities law than the one implicated
in this case. See 575 U.S. at 186 (analyzing section 11 of the
Securities Act of 1933, 15 U.S.C. § 77k(a)). We have joined
the consensus of many of our sister Courts of Appeals in

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the circumstances, understand an opinion statement to convey
facts about how the speaker has formed the opinion . . . .” Id.
at 188. Thus, “if the real facts are otherwise, but not provided,
the opinion statement will mislead its audience.” Id. The
Supreme Court identified two ways in which an opinion
statement may mislead investors “about the speaker’s basis for
holding that view.” Id. First, an opinion statement may
mislead investors about what the speaker did by “omit[ting]
material facts about the issuer’s inquiry into” the facts relevant
to the opinion (“inquiry theory”). Id. at 189. The statement,
“[w]e believe our conduct is lawful,” for example, may be
misleading if the speaker concealed that he did not consult an
attorney before forming the opinion. Id. at 188. Second, an
opinion statement may mislead investors about what the
speaker knew by “omit[ting] material facts about the
issuer’s . . . knowledge” of the evidence for and against the
opinion (“knowledge theory”). Id. at 189. The same statement,
“[w]e believe our conduct is lawful,” may therefore be
misleading if the speaker withheld the fact that his own lawyers
told him otherwise. Id.
This Court recently applied Omnicare’s misleading-by-
omission theory of liability to claims of misleading loss reserve
statements by an insurance company. In City of Warren Police
& Fire Retirement System v. Prudential Financial, Inc., we
applying the misleading-by-omission framework of Omnicare
to section 10(b) and Rule 10b-5. See Prudential, 70 F.4th at
685–86 (observing that section 11 and Rule 10b-5 “use almost
identical language in prohibiting misrepresentations and
omissions” and that the Court “has already held that § 11 and
Rule 10b-5 share the same standard of materiality for
misleading statements”).

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held that when loss reserves are challenged as predictive
statements about the amount of funds needed for future claims,
“the stated reserve amount, as a manifestation of actuarial
judgment, functions as an opinion.” 70 F.4th at 684. The
plaintiff in Prudential alleged that an insurance company’s loss
reserve statement was misleading because it omitted data about
increased mortality (and thus increased claims) in one segment
of the company’s life insurance portfolio. To determine
whether the plaintiff stated a claim of securities fraud, the
Court analyzed whether the factual allegations plausibly
established that the omitted data was material. We answered
in the negative.
We determined in Prudential that the plaintiff failed to
allege necessary facts about the omitted data’s importance to
the setting of loss reserves. Because loss reserves are “based
on a variety of complex assumptions and considerations,” id.
(citing Shapiro v. UJB Fin. Corp., 964 F.2d 272, 281 (3d Cir.
1992)), a reasonable investor would understand that an
inherently predictive loss reserve announcement “rest[s] on a
weighing of competing facts,” id. at 687 (quoting Omnicare,
575 U.S. at 190). The failure to disclose “some fact cutting the
other way” does not “necessarily” render that loss reserve
announcement misleading. Id. (quoting Omnicare, 575 U.S. at
189). We deemed the complaint in Prudential deficient
because it alleged that one segment within a larger insurance
portfolio “had a consistently negative mortality experience”
but alleged nothing about the significance of that adverse data
relative to the “many factors Prudential considered in setting
its reserves.” Id. at 686–87. The Court acknowledged that “the
alleged negative mortality in the [segment] would tend to
increase the amount of needed reserves,” but the Court could
not identify any “accompanying allegation that the negative

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mortality . . . was so great that it would, for a reasonable
investor, eclipse the balance of the numerous other
considerations used to set reserves” for the entire insurance
portfolio. Id. at 687. We therefore concluded that the plaintiff
had failed to plausibly allege that the omission was material.
We did not hold in Prudential, however, that omitting
adverse historical data from a loss reserve statement is never
misleading. The plaintiff in Prudential did not plausibly allege
materiality because it provided no information on how the
omitted data compared to other considerations. The complaint
contained no “allegations about the relative size” of the
struggling segment nor “the magnitude of [its] problems.” Id.
at 689. But our Prudential decision does not stand for the
proposition that insurance companies may withhold all adverse
data from the view of investors when announcing reserves
simply because reserve determinations are complex.
Reasonable investors do “not expect that every fact known to
an issuer supports its opinion statement,” but they assume that
the material ones do. Omnicare, 575 U.S. at 190 (emphasis
omitted). Separating the material from the immaterial is a
context-specific task, id., and our ruling in Prudential did not
create a context-blind rule governing all claims of misleading
reserve statements.
B.
Setting aside (for now) the question of whether
discovery was adequate, we conclude that there are genuine,
material factual disputes in the current record that provide
grounds to vacate the entry of summary judgment. The District
Court granted summary judgment after holding that there was
no genuine dispute of material fact on one element of

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Boilermaker’s section 10(b) and Rule 10b-5 claim: whether
Maiden “made a misstatement or omission of a material fact”
that rendered its loss reserve statements misleading.
Semerenko v. Cendant Corp., 223 F.3d 165, 174 (3d Cir.
2000). We thus focus our de novo review of the record on
whether Boilermaker “adduce[d] more than a mere scintilla of
evidence in its favor” on this element. Williams v. Borough of
West Chester, 891 F.2d 458, 460 (3d Cir. 1989). We conclude
that it did.
The District Court held that Maiden’s statements were
not misleading as a matter of law after making two findings.
First, it found that “the record indisputably shows Maiden
engaged in a complex actuarial process that considered
historical losses.” J.A. 18. Second, it found nothing “in the
record to suggest that the revelation of [higher] historical loss
ratios would totally ‘eclipse the balance of the numerous other
considerations used to set reserves’ if revealed to investors.”
J.A. 18 (quoting Prudential, 70 F.4th at 687). These statements
do not fully address the claim Boilermaker was asserting or the
legal standard applicable to that claim.
Maiden’s mere consideration of historical loss ratios
does not entitle it to judgment as a matter of law because
Boilermaker relies on a knowledge theory, not an inquiry
theory, in asserting its claim that Maiden’s statements were
misleading by omission. To understand why, consider once
more the hypothetical opinion statement, “[w]e believe our
conduct is lawful.” Omnicare, 575 U.S. at 188. If a plaintiff
claimed that this statement was misleading because the speaker
did not disclose that his legal counsel told him that the conduct
was illegal, it would be no defense for the speaker to respond,
“well, I considered the advice.” Rather, if the speaker knew of

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the advice, whether his statement is misleading depends on
how significant that known contrary advice was. The answer
to that question will “always depend[] on context.” Omnicare,
575 U.S. at 190. On the one hand, if the speaker’s full team of
in-house attorneys told him the conduct was illegal, but the
speaker did not reveal that, investors would have “cause to
complain.” Id. at 188. In contrast, if a “single junior attorney
expressed doubts . . . when six of his more senior colleagues
gave a stamp of approval,” the failure to disclose the junior
attorney’s comments “would not make the statement of
opinion misleading.” Id. at 190.
Boilermaker’s theory of securities fraud was that
Maiden unlawfully omitted known, materially adverse
historical loss ratios that conflicted with Maiden’s loss ratio
estimates and loss reserve statements as reported in SEC
disclosure forms. Contrary to the District Court’s suggestion,
Boilermaker never alleged that “Maiden did not consider any
of this material in setting loss reserves.” J.A. 12. Boilermaker
alleged the opposite, asserting that Maiden considered but
concealed its historical loss ratio data. See J.A. 3581
(“Defendants knew of or recklessly disregarded data showing
a pattern [of] incurred losses . . . [that] materially conflicted
with the loss reserves Defendants reported.”). There is no
dispute that Maiden had access to historical loss data that it
omitted from its statements about loss reserves.
The critical question is whether the omitted historical
loss data was material. Reading the record in the light most
favorable to Boilermaker, a reasonable factfinder could find
that it was. The Court appreciates that Maiden’s actuarial
process for loss reserve calculations was complex. The
voluminous record in this case is a testament to that

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complexity. But there is sufficient evidence in the summary
judgment record to permit a reasonable factfinder to conclude
that the omitted historical loss data was indeed material. See
In re Ikon Off. Sols., Inc., 277 F.3d 658, 666 (3d Cir. 2002).
Three straightforward findings drawn from the record would
support that conclusion.
First, the record contains evidence that negative
developments in Maiden’s AmTrust segment would have an
outsized impact on Maiden’s entire business. Maiden
repeatedly emphasized how important AmTrust was to
Maiden. In every SEC 10-K Form filed for 2013 through 2017,
Maiden reminded investors that “AmTrust is Maiden’s largest
client relationship” and that Maiden was “dependent . . . on
AmTrust . . . for a substantial portion of [Maiden’s] business.”
J.A. 178 (2013); J.A. 532 (2014); J.A. 856–57 (2015); J.A.
1183 (2016); J.A. 1534 (2017); see also J.A. 2892 (2018 10-K
form similarly providing that “AmTrust is [Maiden’s] largest
client”). When Maiden’s “total capital resources decreased by
$677.9 million, or 45.4%” from 2017 to 2018, Maiden
identified only two causes: poor investment performance and
“significant adverse loss development within [Maiden’s]
AmTrust Reinsurance segment.” J.A. 2950–51. Even setting
all that aside, a factfinder could still reasonably find that losses
from Maiden’s business with AmTrust could pose a serious
risk of material harm to Maiden because it was undisputed that
AmTrust accounted for more than 70% of Maiden’s net
premiums earned for much of the class period.
Second, the record contains evidence that Maiden had
access to historical loss data for AmTrust that was inconsistent
with Maiden’s loss ratio picks. Boilermaker derived the
alleged loss ratios from Maiden’s own financial documents,

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see J.A. 2140–41, record evidence suggests that this loss
information would have been regularly “reported to” Maiden,
e.g., J.A. 551, and Maiden even conceded that the alleged loss
ratios were “approximately accurate.” Those loss ratios
indicate that Maiden’s losses with AmTrust increased
consistently and substantially over several years. Most prior
AYs exceeded 70% losses by year-end 2014. By year-end
2017, the average loss ratio for all prior AYs was 71.1%, and
multiple AYs even surpassed 80% losses. Yet Maiden set and
reported loss reserves based on much lower loss ratio picks
ranging from 50% to 60%. In qualitative terms, the record
suggests that Maiden possessed data showing that its largest
segment became increasingly unprofitable year after year, but
Maiden informed investors it expected continued profits
without disclosing the adverse historical data suggesting
otherwise.
Third, the record contains evidence that the negative
historical data was (or should have been) an important part of
Maiden’s loss reserve estimation process. Maiden told
investors time and again that “historic loss development . . . is
assumed to be indicative of future loss development and
trends.” J.A. 199, 550, 875, 1203. Along those lines, Maiden
assured investors that it would “establish or adjust reserves . . .
based upon loss data received from the ceding companies with
which [it] do[es] business, including AmTrust.” E.g., J.A. 517.
Granted, a factfinder might have to balance those statements
against Maiden’s disclaimers to investors that “[a]ctual results
could materially differ from [its] estimates,” e.g., J.A. 598, or
that there is no “precise method . . . for evaluating the impact
of any specific factor on the adequacy of reserves,” e.g., J.A.
517. But nothing in the record as it stands — particularly when
read in the light most favorable to Boilermaker — would

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preclude a reasonable factfinder from crediting Maiden’s
repeated statements that historical data was one of the “most
significant” components of its loss reserve calculation process.
E.g., J.A. 550.
Viewed in isolation, any one of these three
considerations would not establish that the omitted data was
material to Maiden’s predicted losses. The relative importance
of AmTrust’s business to Maiden matters only insofar as
Boilermaker can show the degree of AmTrust’s
underperformance. And, even still, AmTrust’s historical
underperformance matters only insofar as Boilermaker can
show that historical trends were a significant part of Maiden’s
complex, multifactor loss-reserve process. If, for example,
there were no dispute that historical data was a miniscule
consideration in loss-reserve calculations, always
overshadowed by other factors, then no reasonable investor
would expect such data to be disclosed every time historical
losses diverged from predicted losses. See Omnicare, 575 U.S.
at 190 (“A reasonable investor does not expect that every fact
known to an issuer supports its opinion statement.”).
Yet we do not deal with these factors in isolation:
viewed holistically, the evidence in the current record provides
the full “context” necessary to raise a genuine issue of material
fact as to whether the omission of AmTrust’s historical loss
data was material. Id. There is evidence that Maiden’s
business depended on AmTrust and that historical trends were
one of the most significant considerations when Maiden set
reserves. Maiden stated both points expressly in its
communications to investors, and a reasonable factfinder could
thus conclude that investors would expect Maiden’s predicted
losses to align with historical trends in its AmTrust business.

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Add to this the evidence that Maiden’s predicted losses
diverged by roughly 10–20% from its historical losses with
AmTrust — including several, increasingly unprofitable AYs
— and that factfinder could fairly conclude that Maiden’s
omission of that discrepancy when announcing its optimistic
predictions would mislead investors.
Maiden argues that the District Court was correct to
hold that the omitted data was immaterial because it did not
“totally ‘eclipse the balance of the numerous other
considerations used to set reserves.’” J.A. 19 (quoting
Prudential, 70 F.4th at 687). But Maiden’s proposed “total
eclipse” rule, even if based on a (modified) phrase in our
Prudential opinion, suggests a heightened standard of
materiality that our Prudential decision cannot support. We
have long held that materiality questions demand “delicate
assessments of the inferences a reasonable shareholder would
draw from a given set of facts [that] are peculiarly for the trier
of fact.” Shapiro, 964 F.2d at 280 n.11 (citing TSC Indus., Inc.
v. Northway, Inc., 426 U.S. 438, 450 (1976)). That approach
is consistent with the Supreme Court’s description of
materiality as a “fact-specific inquiry” into whether there is a
“substantial likelihood that the disclosure of the omitted fact
would have been viewed by the reasonable investor as having
significantly altered the ‘total mix’ of information made
available.” Basic Inc. v. Levinson, 485 U.S. 224, 231–32, 240
(1988) (quoting TSC, 426 U.S. at 449). The Supreme Court’s
Omnicare decision did not change this materiality inquiry, see
575 U.S. at 190, and we have reaffirmed our longstanding,
context-based materiality standard since Omnicare was
decided, see SEC v. Chappell, 107 F.4th 114, 130 n.24 (3d Cir.
2024) (quoting Shapiro, 964 F.2d at 280 n.11).

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The complexity of Maiden’s loss reserve
determinations did not give Maiden free rein to omit any
“known contradictory evidence” so long as it did not hide the
single most important evidence. Omnicare, 575 U.S. at 189
n.6. Maiden’s omission of historical loss data is material so
long as it is “significant” enough that it would, if revealed to a
reasonable investor, “alter[] the ‘total mix’ of information”
presented. Basic, Inc., 485 U.S. at 232. The total mix of
information in the record here leads us to conclude that, at a
minimum, “reasonable minds [could] differ on the question of
materiality.” TSC, 426 U.S. at 450 (quoting Johns Hopkins
Univ. v. Hutton, 422 F.2d 1124, 1128 (4th Cir. 1970)).
We disagree with Maiden’s assertion that our Prudential
case involved “circumstances nearly identical to those here.”
Maiden Br. 20. The summary judgment record in this case is
a far cry from the vague factual assertions at issue in
Prudential. The plaintiff in Prudential alleged that one segment
of a larger insurance portfolio experienced fourteen months of
“consistently negative mortality” but offered no description of
the relative size of the segment nor the magnitude of the
negative trends therein. 70 F.4th at 686; see id. 687, 689. In
contrast, the record here contains various calculations, charts,
and statements capturing Maiden’s many years of substantial
and growing losses with AmTrust, Maiden’s dependence on
AmTrust as its largest client, and the importance of historical
trends to Maiden’s loss reserve process.
Maiden also claims, again invoking this Court’s
Prudential ruling, that “a purported disparity between a single
input and the ultimate loss-reserve estimate, without the single
input having been disclosed, does not render the loss-reserve
estimate misleading.” Maiden Br. 24. But no such categorical

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rule exists. We held in Prudential that these kinds of omissions
are “not necessarily misleading.” 70 F.4th at 687 (emphasis
added) (quoting Omnicare, 575 U.S. at 189). The omission of
known contradictory data is not per se immaterial just because
a statement of opinion was informed by multiple
considerations, and we decline to adopt Maiden’s proposed
context-blind rule, which is inconsistent with our precedent
and that of the Supreme Court.
In the alternative, Maiden asks this Court to affirm on
the grounds that Boilermaker raised no genuine issue of
material fact as to scienter — an element the District Court did
not analyze. Scienter for purposes of Rule 10b-5 liability
consists of “a mental state embracing intent to deceive,
manipulate, or defraud.” Tellabs, Inc. v. Makor Issues & Rts.,
Ltd., 551 U.S. 308, 319 (2007) (quoting Ernst & Ernst v.
Hochfelder, 425 U.S. 185, 193 n.12 (1976)). Evidence of
scienter may include knowledge of the underlying facts
relevant to the false or misleading statement, Belmont v. MB
Inv. Partners, Inc., 708 F.3d 470, 493 (3d Cir. 2013), unusual
stock selling activity, Institutional Invs. Grp. v. Avaya, Inc.,
564 F.3d 242, 279 (3d Cir. 2009), or suspicious “departure[s]
of corporate executive defendants,” In re Hertz Glob. Holdings
Inc., 905 F.3d 106, 118 (3d Cir. 2018). Yet “determination of
whether a party acted with scienter, intertwined as it may be
with an assessment of witness credibility, often cannot be
undertaken appropriately on summary judgment proceedings.”
Ikon Off. Sols., 277 F.3d at 668.
The Court declines Maiden’s invitation to affirm on
these alternative grounds. For one, Maiden’s argument sits
awkwardly alongside its insistence that “Defendants proved
they did consider historical loss information,” Maiden Br. 40,

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which implies knowledge of adverse data that Maiden did not
disclose to investors. Most importantly, we are also mindful
that, like the Supreme Court, we are “a court of review, not of
first view.” Cutter v. Wilkinson, 544 U.S. 709, 718 n.7 (2005).
While we may affirm on grounds not reached by the District
Court, Watters, 975 F.3d at 412, we also possess the authority
to remand for the District Court to resolve unaddressed issues
in the first instance, see Howze v. Jones & Laughlin Steel
Corp., 750 F.2d 1208, 1213 (3d Cir. 1984). We find it prudent
to do so here.
At bottom, the Court holds that genuine issues of
material fact require this Court to vacate the entry of summary
judgment on Boilermaker’s section 10(b) and Rule 10b-5
claim. Reviewing the record in the light most favorable to
Boilermaker, the Court concludes that a reasonable factfinder
could find that Maiden’s reserve announcements were
misleading. The Court does not rule on whether the current
record presents genuine issues of material fact as to scienter.
C.
The viability of Boilermaker’s section 20(a) claim
depends on whether there was “an underlying violation of
Section 10(b).” Rahman v. Kid Brands, Inc., 736 F.3d 237,
247 (3d Cir. 2013) (quoting Avaya, 564 F.3d at 252). The
District Court granted summary judgment to Maiden on the
section 20(a) claim because it granted summary judgment to
Maiden on the section 10(b) and Rule 10b-5 claim. Maiden
defends the District Court’s ruling on the same basis and offers
no alternative grounds to affirm. Because the grant of
summary judgment on the section 10(b) and Rule 10b-5 claim

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was improper, we hold that the grant of summary judgment on
the section 20(a) claim was improper as well.
IV.
Having concluded that the summary judgment ruling
must be vacated, we now address the parties’ separate dispute
as to whether discovery was complete when the District Court
granted summary judgment to Maiden. We hold that
additional discovery is necessary upon remand.
The District Court concluded that Boilermaker was not
entitled to additional discovery because Boilermaker’s earlier
requests for similar evidence were denied by the Magistrate
Judge. But those prior discovery limitations arose in a distinct
context. The Magistrate Judge communicated multiple times
that she limited discovery based on the “understanding” that
the sole purpose of this limited discovery was for Maiden to
have “the opportunity to renew its motion to dismiss.” J.A.
3376; see also J.A. 3501–02. It was on those grounds that the
Magistrate Judge ruled, and the District Court affirmed, that
“typical discovery under the rules” was not required at this
initial stage. J.A. 3501. This characterization of discovery as
atypical is consistent with the Magistrate Judge advising
Maiden that she was “allowing [only] a motion to dismiss” at
the conclusion of limited discovery. J.A. 3378.5
Whatever limitations on discovery were imposed for
purposes of Maiden’s renewed motion to dismiss, Boilermaker
5 The Magistrate Judge acknowledged that the District Court
could choose to convert Maiden’s renewed motion to dismiss
to one for summary judgment.

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should have received “typical discovery under the rules”
before facing an adverse summary judgment ruling. J.A. 3501.
That discovery has yet to occur. For example, Boilermaker
sought (and continues to seek) “complete documentation
identifying what the historical loss ratios were for the AmTrust
business for each of the relevant fiscal quarters.” J.A. 3255.
Such evidence may be relevant to Boilermaker’s claim but was
excluded as beyond the scope of the limited discovery phase
set by the Magistrate Judge and District Court. The litigation
has moved past this initial stage and now should proceed to
typical discovery under the Federal Rules of Civil Procedure.
In sum, because discovery is incomplete, the Court will
remand with instructions to permit full discovery. The Court
trusts the District Court and Magistrate Judge to exercise their
sound discretion to manage discovery in a manner consistent
with the legal principles set forth in this opinion.
V.
For the foregoing reasons, we will vacate the judgment
of the District Court and remand for further proceedings
consistent with this opinion.

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