Today, the Co-Directors of the SEC Division of Enforcement, Stephanie Avakian and Steven Peikin, issued a brief cautionary statement regarding market integrity in the era of the COVID-19 pandemic. The statement acknowledged the unprecedented impact of COVID-19 on the securities markets and emphasized the importance of "maintaining market integrity and following corporate controls and procedures."

Most notably, they observed that, in light of the prevailing uncertainty, there is a substantial amount of particularly valuable new inside information to which more than the usual numbers of people are privy, and they cautioned corporate insiders to be mindful of their obligations not to trade in securities on the basis of that inside information:

"[I]n these dynamic circumstances, corporate insiders are regularly learning new material nonpublic information that may hold an even greater value than under normal circumstances. This may particularly be the case if earnings reports or required SEC disclosure filings are delayed due to COVID-19. Given these unique circumstances, a greater number of people may have access to material nonpublic information than in less challenging times. Those with such access – including, for example, directors, officers, employees, and consultants and other outside professionals – should be mindful of their obligations to keep this information confidential and to comply with the prohibitions on illegal securities trading. Trading in a company's securities on the basis of inside information may violate the antifraud provisions of the federal securities laws."

They also stressed that, to protect against the improper dissemination and use of material nonpublic information, companies must follow their established disclosure controls and procedures, insider trading prohibitions, codes of ethics, and Reg FD and selective disclosure prohibitions.

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