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February 2, 2022

02 February 2022

The Disclosure Process Defense to Securities Fraud Claims, Part I: Key Steps for Litigation Preparedness

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One of the most effective—but underutilized—defenses against claim a of securities fraud is a disclosure process defense: that the defendants reasonably relied on a robust process for drafting, reviewing, and approving the public disclosures at issue.

It will come as no surprise to corporate counsel that public companies should be prepared to face allegations of securities fraud. Private securities class actions are filed after nearly any sharp stock-price decline, and government enforcement actions are on the rise and are increasingly aggressive. One of the most effective—but underutilized—defenses against such claims is a disclosure process defense: that the defendants reasonably relied on a robust process for drafting, reviewing, and approving the public disclosures at issue. (more…)