15 U.S.C. § 78u–5 — Application of safe harbor for forward-looking statements

(a) Applicability This section only covers forward-looking statements made by: (1) an issuer that, when it makes the statement, must file reports with the SEC under section 78m(a) or 78o(d) of this title; (2) a person acting on that issuer's behalf; (3) an outside reviewer the issuer hired, making a statement on the issuer's behalf; or (4) an underwriter, for information the issuer provided or information derived from it. (b) Exclusions Unless the SEC says otherwise by rule, regulation, or order, this section does not cover a forward-looking statement: (1) about the issuer's business or operations, if the issuer — (A) in the 3 years before the statement was made, (i) was convicted of one of the felonies or misdemeanors listed in section 78o(b)(4)(B)(i)–(iv), or (ii) became subject to a government court or agency order that bars future antifraud violations, requires the issuer to stop violating antifraud rules, or finds that the issuer violated antifraud rules; (B) makes the statement in connection with a securities offering by a blank check company; (C) issues penny stock; (D) makes the statement in connection with a roll-up transaction; or (E) makes the statement in connection with a going-private transaction; or (2) that is (A) included in financial statements prepared under generally accepted accounting principles; (B) in an investment company's registration statement or other filing; (C) made in connection with a tender offer; (D) made in connection with an initial public offering; (E) made in connection with an offering by, or about the operations of, a partnership, limited liability company, or direct participation investment program; or (F) made in a beneficial-ownership disclosure filed under section 78m(d) of this title. (c) Safe harbor (1) In general. Except where subsection (b) applies, in a private lawsuit under this chapter based on an untrue statement of material fact or a misleading omission, a person covered by subsection (a) is not liable for a forward-looking statement — written or oral — if: (A) the statement (i) is identified as forward-looking and comes with meaningful cautionary language identifying important factors that could make actual results differ materially, or (ii) is immaterial; or (B) the plaintiff fails to prove the statement (i), if made by an individual, was made knowing it was false or misleading, or (ii), if made by a company, was made or approved by an executive officer who knew, at the time, that it was false or misleading. (2) Oral forward-looking statements. For an oral forward-looking statement by a reporting issuer (or someone acting for it), the cautionary-statement requirement in (1)(A) is satisfied if: (A) the oral statement itself says it's forward-looking and that actual results might differ materially; and (B) it's also accompanied by an oral statement that (i) more information about the relevant risk factors is in a specific, readily available written document, (ii) names that document or the relevant part of it, and (iii) that document's cautionary language meets the standard in paragraph (1)(A). (3) Availability. Any document filed with the SEC, or generally made available to the public, counts as "readily available" for paragraph (2). (4) Effect on other safe harbors. This safe harbor is in addition to any other exemption the SEC creates under subsection (g). (d) Duty to update Nothing in this section requires anyone to later update a forward-looking statement. (e) Dispositive motion On a motion to dismiss based on the safe harbor in subsection (c)(1), the court considers any statement cited in the complaint, along with any cautionary statement the defendant cites that goes with the forward-looking statement and isn't genuinely disputed. (f) Stay pending decision on motion In a private lawsuit under this chapter, discovery is paused — except discovery specifically about whether this section's exemption applies — while a defendant's motion for summary judgment is pending, if that motion argues (1) the statement or omission in the complaint is a forward-looking statement under this section, and (2) this section's exemption bars the claim. (g) Exemption authority Beyond the exemptions in this section, the SEC can create other exemptions from any provision of this chapter by rule or regulation — including for liability based on projections or other forward-looking information — if the SEC decides the exemption fits the public interest and investor protection. (h) Effect on other authority of Commission Nothing in this section limits the SEC's authority to adopt similar rules about forward-looking statements under any other law it enforces. (i) Definitions (1) "Forward-looking statement" means: (A) a projection of revenues, income (or loss), earnings (or loss) per share, capital expenditures, dividends, capital structure, or similar financial items; (B) a statement of management's plans or objectives for future operations, including plans for the issuer's products or services; (C) a statement about future economic performance, including one made in a management discussion and analysis of financial condition or operating results required by SEC rules; (D) a statement of the assumptions behind a statement described in (A), (B), or (C); (E) a report by an outside reviewer the issuer hired, to the extent it assesses one of the issuer's forward-looking statements; or (F) a projection or estimate of any other item the SEC specifies by rule. (2) "Investment company" has the same meaning as in section 80a–3(a) of this title. (3) "Going private transaction" has the meaning given by SEC rules under section 78m(e) of this title. (4) "Person acting on behalf of an issuer" means any officer, director, or employee of that issuer. (5) Other terms — "blank check company," "rollup transaction," "partnership," "limited liability company," "executive officer of an entity," and "direct participation investment program" — have the meanings the SEC gives them by rule or regulation.