Partner Allan Horwich was quoted on an issue arising from the sudden death of the CEO of CSX Corp. about how much information companies need to disclose to shareholders about their executives’ health.
Allan said that while the U.S. Securities and Exchange Commission (SEC) rules do not require companies to disclose serious health problems, companies cannot issue half-truths or lies about the executives.
“The most important thing is whether there were statements made by the company since he was hired that were inconsistent with the true state of his health at the time, and whether the company knew that,” he said.
Allan emphasized that disclosures are judged by what the company knew in assessing the future, saying “If things didn’t turn out as they expected, that doesn’t mean that the company lied or that the disclosure was defective.”
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