What information is “material” for purposes of FD?
FD doesn t define materiality. Instead, it refers to a common guideline under the federal securities laws: “information is material if there is a substantial likelihood that a reasonable shareholder would consider it important in making an investment decision, or if it would have significantly altered the “total mix” of information made available. ” Presumably, guidance as to future results normally would be considered material. Certainly a disclosure that a company expects to miss Street targets for a quarter by an appreciable amount would be material. If you find yourself asking whether a particular piece of information is material, you should probably check with your securities counsel for her view. Remember, materiality is often assessed with the benefit of knowing in hindsight how the market reacted.
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