SEC: Public Company Disclosure Key to Evolving COVID-19 Response & Recovery Strategy

By Randi Morrison posted 04-08-2020 07:35 PM

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This must-read public statement issued today by SEC Chair Clayton and Division of Corporation Finance Director Bill Hinman: "The Importance of Disclosure – For Investors, Markets and Our Fight Against COVID-19" calls on companies to make every reasonable effort to focus their upcoming earnings releases, analyst and investor calls, and other public communications to the market, on their current and future status, e.g., actual and expected operations, liquidity, financial resource needs (including the impacts or expected impacts of CARES Act of other financial assistance), and COVID-19 response/mitigation plans, in lieu of focusing on historical - particularly quantitative - information, which is likely to be less relevant (if not irrelevant) under the current COVID-19 circumstances. Read as a whole, it appears clear that Chair Clayton and Director Hinman see robust and forward-looking public company disclosure as a critical component to fostering and ultimately - over time - resuming normal economic activity.

Notwithstanding the standard caveat ("This statement represents the views of the Chairman and the Director of the Division of Corporation Finance of the SEC. It is not a rule, regulation, or statement of the SEC..."), every public company should review this Statement carefully to understand the SEC's financial reporting-related expectations and associated assurances concerning forward-looking disclosure in advance of any near-term communications to the market.

We will be posting analysis and commentary on our Financial Reporting page under Coronavirus (COVID-19).

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