Safe Harbor for Forward-Looking Statements Under the Private Securities Litigation Reform Act of 1995: What's Safe and What's Not?
Dickinson Law Review, Vol. 105, pp. 1-30, 2000
30 Pages Posted: 17 Jul 2009
Date Written: 2000
Abstract
The PSLRA’s safe harbor provisions define forward-looking statements and permit certain issuers to disclose predictive information without liability, as long as the statements are accompanied by cautionary language sufficient to warn investors of projections’ inherent unreliability. This article analyzes the existing safe harbor cases. It focuses on the courts’ interpretation of 'forward looking statement,' explaining results and attempting to reconcile them one with another, while identifying trends in judicial analysis. Similarly, the paper meticulously studies the courts’ construction of the 'meaningful cautionary language' requirement.
Interpretation of this new safe harbor is central to securities issuers’ disclosure of forward looking information in SEC filings, in press releases, press conferences, telephone conferences with analysts, and in other literature disseminated to investors. Consequently the paper concludes by issuing specific advice to issuers and their professional advisors on how best to proceed under the safe harbor and its interpretations in the courts so far.
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