15 U.S. Code § 77z–2 - Application of safe harbor for forward-looking statements
This section shall apply only to a forward-looking statement made by—
(1) an issuer that, at the time that the statement is made, is subject to the reporting requirements of section 78m (a) orsection 78o (d) of this title;
Except to the extent otherwise specifically provided by rule, regulation, or order of the Commission, this section shall not apply to a forward-looking statement—
(1) that is made with respect to the business or operations of the issuer, if the issuer—
(A) during the 3-year period preceding the date on which the statement was first made—
(i) was convicted of any felony or misdemeanor described in clauses (i) through (iv) of section 78o (b)(4)(B) of this title; or
(ii) has been made the subject of a judicial or administrative decree or order arising out of a governmental action that—
(II) requires that the issuer cease and desist from violating the antifraud provisions of the securities laws; or
(B) makes the forward-looking statement in connection with an offering of securities by a blank check company;
(2) that is—
(A) included in a financial statement prepared in accordance with generally accepted accounting principles;
(E) made in connection with an offering by, or relating to the operations of, a partnership, limited liability company, or a direct participation investment program; or
(c) Safe harbor
(1) In general
Except as provided in subsection (b) of this section, in any private action arising under this subchapter that is based on an untrue statement of a material fact or omission of a material fact necessary to make the statement not misleading, a person referred to in subsection (a) of this section shall not be liable with respect to any forward-looking statement, whether written or oral, if and to the extent that—
(A) the forward-looking statement is—
(i) identified as a forward-looking statement, and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the forward-looking statement; or
(B) the plaintiff fails to prove that the forward-looking statement—
(i) if made by a natural person, was made with actual knowledge by that person that the statement was false or misleading; or
(2) Oral forward-looking statements
In the case of an oral forward-looking statement made by an issuer that is subject to the reporting requirements of section 78m (a) orsection 78o (d) of this title, or by a person acting on behalf of such issuer, the requirement set forth in paragraph (1)(A) shall be deemed to be satisfied—
(A) if the oral forward-looking statement is accompanied by a cautionary statement—
(i) the oral forward-looking statement is accompanied by an oral statement that additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statement is contained in a readily available written document, or portion thereof;
(ii) the accompanying oral statement referred to in clause (i) identifies the document, or portion thereof, that contains the additional information about those factors relating to the forward-looking statement; and
Any document filed with the Commission or generally disseminated shall be deemed to be readily available for purposes of paragraph (2).
(d) Duty to update
Nothing in this section shall impose upon any person a duty to update a forward-looking statement.
(e) Dispositive motion
On any motion to dismiss based upon subsection (c)(1) of this section, the court shall consider any statement cited in the complaint and cautionary statement accompanying the forward-looking statement, which are not subject to material dispute, cited by the defendant.
(f) Stay pending decision on motion
In any private action arising under this subchapter, the court shall stay discovery (other than discovery that is specifically directed to the applicability of the exemption provided for in this section) during the pendency of any motion by a defendant for summary judgment that is based on the grounds that—
(1) the statement or omission upon which the complaint is based is a forward-looking statement within the meaning of this section; and
(g) Exemption authority
In addition to the exemptions provided for in this section, the Commission may, by rule or regulation, provide exemptions from or under any provision of this subchapter, including with respect to liability that is based on a statement or that is based on projections or other forward-looking information, if and to the extent that any such exemption is consistent with the public interest and the protection of investors, as determined by the Commission.
(h) Effect on other authority of Commission
Nothing in this section limits, either expressly or by implication, the authority of the Commission to exercise similar authority or to adopt similar rules and regulations with respect to forward-looking statements under any other statute under which the Commission exercises rulemaking authority.
For purposes of this section, the following definitions shall apply:
(1) Forward-looking statement
The term “forward-looking statement” means—
(A) a statement containing a projection of revenues, income (including income loss), earnings (including earnings loss) per share, capital expenditures, dividends, capital structure, or other financial items;
(B) a statement of the plans and objectives of management for future operations, including plans or objectives relating to the products or services of the issuer;
(C) a statement of future economic performance, including any such statement contained in a discussion and analysis of financial condition by the management or in the results of operations included pursuant to the rules and regulations of the Commission;
(D) any statement of the assumptions underlying or relating to any statement described in subparagraph (A), (B), or (C);
(E) any report issued by an outside reviewer retained by an issuer, to the extent that the report assesses a forward-looking statement made by the issuer; or
(2) Investment company
(3) Penny stock
(4) Going private transaction
(5) Securities laws
The term “securities laws” has the same meaning as in section 78c of this title.
(6) Person acting on behalf of an issuer
The term “person acting on behalf of an issuer” means an officer, director, or employee of the issuer.
Source(May 27, 1933, ch. 38, title I, § 27A, as added Pub. L. 104–67, title I, § 102(a),Dec. 22, 1995, 109 Stat. 749; amended Pub. L. 105–353, title III, § 301(a)(5),Nov. 3, 1998, 112 Stat. 3235; Pub. L. 111–203, title IX, § 985(a)(4),July 21, 2010, 124 Stat. 1933.)
2010—Subsec. (c)(1)(B)(ii). Pub. L. 111–203substituted comma for semicolon after “entity” in introductory provisions.
1998—Pub. L. 105–353made technical correction relating to placement of section in subchapter.
Effective Date of 2010 Amendment
Amendment by Pub. L. 111–203effective 1 day after July 21, 2010, except as otherwise provided, see section 4 ofPub. L. 111–203, set out as an Effective Date note under section 5301 of Title 12, Banks and Banking.
Section not to affect or apply to any private action arising under this subchapter or title I of the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), commenced before and pending on Dec. 22, 1995, see section 108 ofPub. L. 104–67, set out as an Effective Date of 1995 Amendment note under section 77l of this title.
Nothing in section deemed to create or ratify any implied right of action, or to prevent Commission, by rule or regulation, from restricting or otherwise regulating private actions under Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), see section 203 ofPub. L. 104–67, set out as a note under section 78j–1 of this title.
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