In modern many years, public companies have been contending with an increase in securities litigation and private companies have been contending with an increase in Securities and Exchange Commission investigations. COVID-19 threatens to accelerate this development. Corporation executives must be watchful to disclose any product impression the pandemic is owning on their company to lessen the chance of so-named “event-driven” securities litigation.
In “event-driven” litigation, the litigation does not crop up from an accounting restatement rather, there is commonly an “event” and a subsequent stock drop that plaintiffs allege has arisen from that occasion.
Some modern illustrations include litigation brought against Chipotle and Johnson & Johnson. In Chipotle’s case, buyers claimed that the firm should have disclosed the circumstances surrounding food stuff-borne health issues outbreaks. In Johnson & Johnson’s case, buyers claimed that the firm intentionally hid that its talc and