The U.S. Chamber of Commerce has made a dramatic and unprecedented proposal to the SEC, one which places the SEC at the top of a very slippery slope. Through its Institute for Legal Reform and its Center for Capital Markets Competitiveness, it has filed a rulemaking petition with the SEC, asking the SEC

“to bar liability for statements about a company’s plans or prospects for getting back to business, resuming sales or profitability or other statements about the impacts of COVID-19, whether forward looking or not, as long as suitable warnings are attached.”

Experienced securities lawyers will immediately recognize that §21E of the Securities Exchange Act of 1934 already bars liability if the statement qualifies as a “forward-looking statement” and it is accompanied by “meaningful cautionary statements.” But the Chamber’s proposal would go well beyond the existing statutory safe harbor and cover statements (such as those in the financial statements) that are expressly not covered by the existing safe harbor.

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