SEC Encourages Firms to be Vigilant with Disclosure

SEC Chairman Jay Clayton in a statement acknowledged the current reporting challenges for public companies and called on firms to provide as much information as is practicable to investors regarding their current financial and operating status, and future operational and financial planning. Clayton specified that company disclosures should reflect the current state of affairs and outlook and, in particular, respond to investor interest in:  (1) where the company stands today, operationally and financially, (2) how the company’s COVID-19 response, including its efforts to protect the health and well-being of its workforce and its customers, is progressing, and (3) how its operations and financial condition may change as all its efforts to fight COVID-19 progress.  “High quality disclosure will not only provide benefits to investors and companies, it also will enhance valuable communication and coordination across our economy—including between the public and private sectors—as together we pursue the fight against COVID-19,” Clayton said. He urged companies to take advantage of the safe-harbors the SEC provides for forward-looking statements and noted the SEC was unlikely to second-guess “good faith attempts to provide appropriately framed forward-looking information.”