COVID-19 and Rule 10b-5

42 Pages Posted: 25 Feb 2021 Last revised: 24 Jun 2021

Date Written: February 19, 2021


The COVID-19 pandemic presented wide-ranging challenges for businesses. Not the least of these is compliance with the federal securities laws, including the prohibition – most notably under SEC Rule 10b-5 – on materially deceptive statements made to the public. Both the SEC, in its role as enforcer of the law, and private parties, seeking to represented classes of aggrieved investors, have filed complaints asserting that corporations and others have engaged in deception of investors regarding matters pertaining to COVID-19. Some of these claims relate to disclosures regarding testing kits for the virus as well as development of vaccines. Other complaints allege faulty disclosure on the effect of the pandemic on the market for a company’s products and services that are not themselves related to the pandemic, such as claims against cruise lines that suspended operations.

This article presents the legal framework for claims based on Rule 10b-5, SEC guidance on how COVID-19 affects compliance with disclosure requirements for public companies, and the issues that have emerged in the claims already filed This analysis demonstrates that almost any public reporting company faces the risk of inadequate disclosure and the temptation to withhold or misstate material facts in a time of financial stress.

Keywords: Rule 10b-5, securities law disclosure, COVID-19

JEL Classification: K10, K30

Suggested Citation

Horwich, Allan, COVID-19 and Rule 10b-5 (February 19, 2021). 55 University of Richmond Law Review Online 101 (2021), Northwestern Law & Econ Research Paper No. 21-01, Available at SSRN: or

Allan Horwich (Contact Author)

Northwestern University - Pritzker School of Law ( email )

375 E. Chicago Ave
Chicago, IL 60611
United States

ArentFox Schiff ( email )

233 S. Wacker Drive
Suite 7100
Chicago, IL 60606-6473
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics