Mixed Statements: The Safe Harbor's Rocky Shore

Abstract:     
In this essay, the author analyzes how to apply the Private Securities Litigation Reform Act’s safe harbor for forward-looking statements to “mixed statements” – in which statements about the past or present are intertwined with statements about the future. The author identifies three categories of mixed statement that are the subject of frequent litigation, demonstrates the courts’ disagreement about their treatment, and – drawing from the statutory text and policy rationales – recommends how the safe harbor should apply to each category of statement.

In particular, the author argues that (1) statements of historical or current fact that underlie predictions should not be protected by the safe harbor; (2) statements about the present that necessarily incorporate predictions should be protected by the safe harbor; and (3) statements that contain both present and future components should be bifurcated, with the safe harbor protecting only those portions that predict.

Number of Pages in PDF File: 21

Keywords: securities litigation, forward-looking statements, safe harbor, Private Securities Litigation Reform Act

Accepted Paper Series