COVID-19 has upended every corner of the financial markets, including the disclosure regime for publicly traded companies. Over the last few weeks, the number of disclosures relating to COVID-19 has exploded, with as many coronavirus-related 8-K filings in the first two days of April (more than 150) as in the first two months of 2020.

Simultaneously, the U.S. Securities and Exchange Commission[1] and Financial Industry Regulatory Authority[2] have announced that they are actively monitoring the markets for “frauds, illicit schemes and other misconduct” concerning COVID-19, and SEC Chairman Jay Clayton recently recognized investors’ thirst for information[3] as earnings season approaches.

These developments, combined with substantial market volatility, will provide countless opportunities for regulators (and private parties) to seize on corporate disclosures relating to COVID-19 as the basis for litigation and enforcement actions.

Reprinted with permission from Law360, April / 2020

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