Furnished vs. Filed Flashcards
Describe the Difference Between “Furnished” (permitted for Item 2.02 and 7.01) and “Filed”?
There are liability and then incorporation by reference implications
Liability-wise, under Section 18(a) of ‘34 Act any statement in a filing,
or included in any exhibit to a filing,
that was false or misleading
can result in direct liability for the company
to any person who transacted in their securities in reliance upon that statement
However SEC created an exception that
if information is permitted to be, and is in fact, “furnished” , rather than filed,
then they wouldn’t necessarily trigger liability under Section 18(a) (so this provides possible relief from certain liability provisions under federal securities laws)
Information that is “furnished” rather than “filed” is not automatically incorporated by reference into filings with the SEC (but this does also mean they aren’t subject to the same level of liability under the ‘33 Act as statements in “filed” documents).
