To: Q. who wrote (4335 ) 10/4/1999 12:20:00 PM From: wonk Respond to
...Holy cow! You don't see this very often in a news release. ...The Private Securities Litigation Reform Act of 1995 (the "Reform Act") provides a new and important safe harbor for disclosures made by reporting companies. In an effort to encourage companies to disclose forward-looking information to investors, the Reform Act eliminates liability under the Securities Acts for certain written and oral forward-looking statements made by a company that is subject to the reporting requirements under Sections 13(a) and 15(d) of the 1934 Act. Generally, the Reform Act sets forth a two-prong test, where, if either prong is satisfied, the reporting company is shielded from liability under the Securities Acts. Under the first prong, liability is precluded with respect to any forward-looking statement that either (i) is identified as forward-looking and is accompanied by "meaningful" cautionary statements which identify important factors that could cause actual results to differ "materially" from those in the forward-looking statement or (ii) is an immaterial statement. The second prong examines the state of mind of the person making the forward-looking statement rather than focusing on the forward-looking and cautionary statements. Under this prong, a company is protected from liability under the Securities Acts where a plaintiff fails to prove that the forward-looking statement (i) when made by an actual person, was made with actual knowledge by that person that the statement was false or misleading or (ii) when made by a "business entity," was made by or with the approval of an executive officer of that entity with actual knowledge by such officer that the statement was false or misleading. Although the Reform Act excepts certain parties and transactions from the new safe harbor protections, the forward-looking safe harbor is designed to enhance market efficiency by facilitating an increased flow of information to investors.... mmmlaw.com
