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Covid-19, or Coronavirus, poses serious challenges to businesses. We talk about some of them here. But the coronavirus crisis will also likely open up many avenues for fraud. After all, when the chips are down like this, the temptation to hide threats and bad results, or overpromise investors, has never been greater.
Already, one pharmaceutical company is facing a securities fraud lawsuit brought by investors, after it bragged publicly that it had developed a coronavirus vaccine.
Because of the stress and temptations from the crisis, the SEC's CorpFin division released a set of guidelines companies should consider now when they look at the risks they face. Among others, CorpFin urges companies to think about:
- How has coronavirus affected your financial condition and operations?
- How has coronavirus affected your capital resources and liquidity?
- How has coronavirus affected your supply chain and workforce?
- How have travel restrictions affected your business?
These are all issues that a business should disclose, or risk being accused of securities fraud. If you have any questions about what you should do - or if you know of a company that is failing to do any of these things - please give us a call at (617) 535-7763, or email us at info@cornelldolan.com. We look forward to talking with you.