Forward-looking forecasts that turn out to be wrong can be protected against liability for securities fraud if they include "meaningful cautionary statements."

Question

Quizplus · Accepted Answer

This is based on the "bespeaks caution" doctrine, which holds that forecasts or projections accompanied by meaningful cautionary statements that warn investors of the risks involved are generally not actionable under securities fraud laws, as they are not considered misleading within the context of those warnings.

Forward-Looking Forecasts That Turn Out to Be Wrong Can Be