SEC Enforcement Co-Directors Stephanie Avakian and Steven Peiken issued a March 23 public statement warning that the novel Coronavirus pandemic increases material non-public information and reminding corporate insiders of their obligation to disclose or abstain.

“Corporate insiders are regularly learning new material nonpublic information that may hold an even greater value than under normal circumstances. This may particularly be the case if earnings reports or required SEC disclosure filings are delayed due to COVID-19. Given these unique circumstances, a greater number of people may have access to material nonpublic information than in less challenging times.”

The SEC reminds those with such access to pay particular attention to insider-trading prohibitions, business codes of ethics and disclosure obligations like Regulation FD.  The SEC will be watching for issues affecting market integrity – perhaps even more so, given the heightened market volatility during this time.

The Statement is here.

The Statement comes even as the first suits have been filed accusing members of Congress of having sold personal securities positions after receiving confidential COVID-19 briefings.  See Jacobsen v. Burr, No. 1:20-cv-00709 (D. D.C., filed Mar. 23, 2020), available on Law360, here.

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