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Carefully drafted risk factors in SEC filings are good insurance

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Aug 20, 2018

On August 20, 2018, Merrill Corporation released an article on how the federal securities laws give a public company the opportunity to create, in effect, an in-house liability insurance policy.

A carefully fashioned Risk Factors section in the Form 10-K serves as a key component of that assurance. Proper disclosure of risk factors can provide powerful protection against a suit alleging securities fraud as well as improve investor relations.

Developing disclosure entails two steps: 1) identify and prioritize the risks; and 2) draft the actual disclosures. The corporate infrastructure needed to identify a risk already exists.

Review the full article on Merrill Corporation's website.

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