Keeping Revenue Forecasts From Becoming Legal Liabilities

Jay Dubow, a partner in Troutman Pepper Locke’s White Collar Litigation + Investigations Practice Group, was quoted in the October 30, 2025 InfoRiskToday article, “Keeping Revenue Forecasts From Becoming Legal Liabilities.”

• Jay A. Dubow, partner with Troutman Pepper Locke, said executives should understand the legal liabilities before making forward-looking statements. “When you make a forward-looking statement, for a private plaintiff to bring a fraud case and say that the statement was materially untrue, they would have to show either that the speaker did not believe what they said, or that the statement was not accompanied by risk factors,” Dubow said.

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• But Safe Harbor has its limits. “If you say we are going to sell 1 million widgets next year, that’s a fact. If you say, I believe that we are going to sell a million widgets next year, that now becomes an opinion,” Dubow said.

• But an opinion can still be misleading if the facts on which it was based indicate the person didn’t have a reasonable belief in the opinion, he added.

• In securities litigation, regulators often rely on key types of evidence to establish knowing misconduct. Critical sources include former employees who can testify about internal discussions in which executives knowingly made false public statements, Dubow said. Insider trading patterns such as stock sales preceding negative announcements may indicate fraud but intent can be tough to prove. Internal documents, reports and emails often reveal discrepancies between what executives knew and what they publicly disclosed, he said.

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• “Most public companies, most of the time, management is not trying to make false statements,” Dubow said. “But things happen. Sometimes they don’t get the right information, or they’re trying to push the envelope to the line. Some executives will try to push the envelope to the edge, and some unfortunately, go over the edge because they might either say too much or say not enough to make the statements completely true.