Brief Fact Summary. Ivax Corp. (Defendant) issued multiple press releases including forward-looking statements.
Synopsis of Rule of Law. When the elements underlying a prediction or economic estimate include both suppositions and declarations of known fact, the complete list is regarded as a forward-looking statement.
Issue. Are mixed statements protected under the safe harbor provision for forward-looking statements?
Held. (Cox, J.) Yes. Forward-looking statements are usually comprised of historical observation and assumptions regarding the future. Therefore, treating the mixed statement in the September 30 press release as a forward-statement is consistent with congressional objective to relax the â€œmuzzling effectâ€ of possible liability for forward-looking statements. This objective is at the core of the safe harbor stipulation. Affirmed.
Discussion. The Private Securities Litigation Reform Act of 1995(PSLRA) attached the safe harbor stipulation for forward-looking statements to the Securities Exchange Act of 1934. The year after the PSLRA’s creation, there was a noticeable upsurge in the quantity of firms proffering financial predictions, with the largest increase among the chancier firms.