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SEC Releases Guidance on Public Disclosure
by Shelby M. Exposito

February 20, 2020 - A city employee's social media post could subject the city to liability for securities fraud in the opinion of the U.S. Securities and Exchange Commission.

The SEC recently published a staff bulletin outlining its views on the application of antifraud provisions to statements made by municipal issuers. The antifraud provisions of the Securities Exchange Act "apply to any statement of a municipal issuer that is reasonably expected to reach investors and the trading markets," such as press releases, media interviews, discussions with interest groups, reports made by an official to a legislative body or by one governmental body to another, and social media posts by employees and elected officials.

Importantly, the antifraud provisions also apply to information on an issuer's website, including historical information, hyperlinks, and summaries of information. "The fact that they are not published for purposes of informing the securities markets does not alter the mandate that they not violate the antifraud provisions."

The SEC concluded its bulletin by encouraging issuers to adopt policies and procedures regarding disclosure and provide periodic training to staff.

For more information on disclosure requirements, contact any of Gust Rosenfeld's Public Finance attorneys:
James T. Giel | 602.257.7495 | jgiel@gustlaw.com
Timothy A. Stratton | 602.257.7465 | tstratton@gustlaw.com
Shelby M. Exposito |602.257.7498 | smexposito@gustlaw.com
Andrew J. McGuire | 602.257.7664 | amcguire@gustlaw.com
Fred H. Rosenfeld | 602.257.7413 | rosenfeld@gustlaw.com
Brandon A. Caywood | 602.257.7679 | bcaywood@gustlaw.com

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