A reblog from one of our own posts from 2012 that is still relevant in 2014. It is important to understand that there is a certain amount of potential liability associated with what is contained within Press Releases. They should be prepared, reviewed and released very carefully.
Press Releases are great tools for business to use to announce an exciting event, new product or contract, or to announce earnings. However, a public company can be exposed to liability under securities laws is a press release contains any material misstatement or creates a misleading impression.
Management should keep the following in mind when drafting a press release:
1) Accuracy: The company should have someone who is familiar with material occurrences in the company review the release to ensure that the disclosures are accurate. Perhaps a disclosure committee, legal or securities counsel, or another member of management. Ensure the disclosure matches what is or will be disclosed in the public filings.
2) Forward Looking Statements: The release should include Forward Looking Statements language describing future events. This creates a “safe harbor” that may protect the company from securities laws challenges. The Forward Looking Statements should clearly identify and cite…
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