Duties to Disclose and Update Material Information

Summary

This practice note discusses the regulatory framework related to the disclosure of material information by public companies and the duty to update previously disclosed information. The disclosure obligations of U.S. public companies are governed by a well-developed regulatory framework that governs the type of information that needs to be disclosed and the manner and timeframe of disclosure. However, the duty to disclose information is not the same as the duty to subsequently revise that information, should the company find out that it was incorrect at the time it was made public (duty to correct), or subsequently became incorrect at a later date (duty to update). An attorney advising a public company must be able identify and distinguish between the various duties relating to disclosure, correcting, and updating. This practice note reviews the basis for each of these duties and highlights best practices for minimizing the duty to update and managing the review and update process.