In a joint statement, the Chair of the Securities and Exchange Commission, Jay Clayton, and the Director of the SEC’s Division of Corporation Finance, William Hinman, exhorted public companies to provide, in connection with upcoming earnings releases and analyst and investor calls, as much transparency as possible regarding the effects on these companies, their financial condition and prospects, as a result of COVID-19 and the resulting market disruptions. In their statement they noted that company disclosures should address:
- where the company stands today, operationally and financially,
- 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
- how its operations and financial condition may change as all our efforts to fight COVID-19 progress. Historical information may be relatively less significant.
In the statement, Chair Clayton and Director Hinman noted that forward-looking disclosures should be considered in light of the safe harbor available for such statements and noted “…we would not expect good faith attempts to provide appropriately framed forward-looking information to be second guessed by the SEC.” See the statement on the SEC’s website.
A Legal Update will follow.