It is illegal under the Securities Exchange Act to make false or misleading statements to the investing public about material facts.  At the same time, corporations and their officers must be able to make statements about the company’s future plans, projections, and aspirations without fear of opening themselves up to claims of securities law liability should the company’s achievements fall short of its ambitions.  The Private Securities Litigation Reform Act, therefore, has carved out a “safe harbor” for certain forward-looking statements, including forward-looking statements accompanied by meaningful cautionary language, and forward-looking statements made by someone who does not know the statement to be false or misleading.

Read the full post on Proskauer’s Corporate Defense and Disputes blog.

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