The Securities Law Questions Raised By #MeToo

By Deborah Birnbach, Jennifer Fay and Dylan Schweers (February 28, 2018, 3:05 PM EST) -- There is a dearth of guidance as to whether and when a public company should disclose details concerning a sexual harassment investigation of one of its executives. Although companies often do not disclose internal or government investigations generally, and there are no cases obligating disclosure of sexual harassment investigations specifically, companies are not impervious to litigation for (1) failing to disclose such information, or (2) breach of fiduciary duty in connection with tolerating sexual harassment. As outlined herein, there are several theories involving federal securities laws and state law governing fiduciary duties through which plaintiffs may attempt to bring suits. Companies conducting sexual harassment investigations should consult outside counsel and continue to reevaluate the investigation's status in order to determine if and when disclosure is either required or legally prudent....

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