Abstract
The SEC mandates that public companies assess new information that changes the risks that they face and disclose these if there has been a “material” change. Does that theory work in practice? Or are companies copying and repeating the same generic disclosures? Using the shock of the COVID-19 pandemic, we explore these questions. Overall, we find considerable rote copying of boilerplate disclosures. Further, the factors that correlate with deviations from the boilerplate seem related more to the resources that companies have (large companies change updated disclosures more) and litigation risks (companies vulnerable to shareholder litigation update more) rather than general economic vulnerability to the pandemic. The exception is companies facing exposure to China.
Disciplines
Banking and Finance Law | Contracts | Law | Law and Economics | Securities Law
Date of this Version
2-20-2024
Working Paper Citation
Choi, Stephen J.; Gulati, Mitu; Liu, Xuan; and Pritchard, Adam C., "COVID-19 Risk Factors and Boilerplate Disclosure" (2024). Law & Economics Working Papers. 269.
https://repository.law.umich.edu/law_econ_current/269
Included in
Banking and Finance Law Commons, Contracts Commons, Law and Economics Commons, Securities Law Commons