Michelle Reed Quoted by Bloomberg Law on SEC and Disclosure Risks

For its article “Hypothetical Scenario Disclosures by Companies Risk SEC Scrutiny,” Bloomberg Law quoted Akin Gump cybersecurity, privacy & data protection practice co-head Michelle Reed.

The article looks at a recent court win by the Securities and Exchange Commission (SEC) in a case involving hypothetical disclosures and the extent to which they can mislead investors. The article also notes that companies, in recent years, have been fined millions of dollars for describing actual risks as “hypothetical.”

Michelle said, “Speaking only hypothetically of incidents is an increasingly dangerous practice in this area.”

The article notes that businesses must walk the line between satisfying the SEC with their description of an incident and not shaking investors’ confidence by overstating the gravity of the situation. Said Michelle, “Companies really face a crossroads when they’re looking at their disclosures. Everyone has to thread the needle in the way that they see fit.”