Public and private companies are required by law to provide accurate information to the government and the public. But some businesses are less than transparent whether intentionally or unintentionally. Corporate disinformation involves the dissemination of misleading information or the concealment of potentially damaging information. This includes financial statements, accounting reports, earnings information, insurance estimates, competitor pricing, diagnostic reviews, and press releases.
Ajamie LLP routinely represents financial institutions, healthcare companies, public and private companies, and senior directors and officers in corporate-disinformation litigation. Our legal team is well-versed in the applicable rules and regulations on disclosure requirements in multiple industries. The firm has both defended and pursued lawsuits involving corporate disinformation.
How Disclosure Requirements Affect Your Business
A wide range of state and federal disclosure requirements may apply to a corporation. These include:
The Sarbanes-Oxley Act of 2002 (SOX) was designed to increase transparency in corporate governance and financial reporting. The law created a formal system of internal checks and balances for public companies. Penalties for non-compliance can be significant, including fines and potential delisting on public stock exchanges. Chief Executive Officers and Chief Financial Officers who must certify SOX compliance face significant fines and imprisonment for willfully submitting false information.
Our attorneys at Ajamie LLP understand the complex issues involved with SOX compliance. We provide advice and guidance to clients about internal controls over financial reporting, and assist with investigations—both internal and external—related to compliance and internal control matters.
Our team advises publicly traded companies on the periodic reporting and disclosure requirements under the Securities Exchange Act of 1934. This includes the following electronic filings through the EDGAR System:
- Annual Reports (Form 10-K)
- Quarterly Reports (Form 10-Q)
- Periodic Reports (Form 8-K)
- Proxy statements
- Beneficial Ownership Reports
- Transaction Reporting by Officers, Directors and 10 percent shareholders
- Executive compensation reporting and disclosures
- Tender offers
- Other Exchange Act filings
We also provide our clients with guidance on other dealings with the Securities and Exchange Commission (SEC), as well as exchange listing and governance standards, internal and external investigations, regulatory enforcement actions, and civil litigation.
Healthcare Company Disclosure Rules
Healthcare organizations must comply with complex rules and regulations at both the state and federal level. At Ajamie LLP, we work to help our clients navigate this regulatory framework. Our team is well-versed in a variety of applicable laws, including:
- The Health Insurance Portability and Accountability Act (HIPAA)
- Emergency Medical Treatment and Active Labor Act (EMTALA)
- False Claims Act (FCA)
We also advise clients on healthcare operational issues such as regulatory audits and licensing and administrative matters.
Disclosure Requirements for Nonpublic Companies
Private companies must also comply with state disclosure requirements. This includes filing formation documents with the Secretary of State in the state where they are domiciled. These documents may be a charter, such as Articles of Incorporation (or a Certificate of Incorporation) for corporations, or a Certificate of Formation for limited liability companies (LLPs), limited partnerships (LPs), and other entities.
Formation documents include basic information like the company’s name, address, and agent for service of process. A corporate charter must broadly state the entity’s business purpose (such as “any lawful act or activity”) and the total number of shares that the entity will be authorized to issue. A company’s bylaws describe its organizational and governance rules, but are not required to be disclosed. Other activities—such as mergers, consolidations, conversions to a different structure, and dissolutions—require a filing with the state in order to make the action effective.
Nonprofit Organization Disclosure Requirements
The IRS grants tax-exempt status to nonprofit organizations such as charities, social clubs, schools, business associations, and veterans organizations. Federal laws require nonprofits to publicly report financial governance information and. The IRS can revoke the tax-exempt status of organizations that fail to disclose this information. Many states require nonprofits to file annual reports and financial information with government agencies such as the Secretary of State or the Attorney General.
Corporate Disinformation Litigation Attorneys
Information today is widely and rapidly disseminated on websites and social media. It is more crucial than ever for businesses to ensure that such information is accurate. By failing to adhere to state and federal disclosure laws or misleading the public, entities face the risk of disinformation litigation. Ajamie LLP works with clients to ensure they fulfill their disclosure obligations. We have a proven track record of defending and pursuing corporate-disinformation claims. Contact our office to schedule a consultation.