(The news featured below is a selection from the news covered in Federal Securities Law Reporter, which is distributed to subscribers of Federal Securities Law Reporter.)

Forward-Looking Statements Not Protected

A district court (DC Del) found that claims against a financial services company and it officers could be actionable. Statements concerning the company's restructuring charges were not protected by the safe harbor because they were contained in the company's Form 8-K, as Section 21E(b)(2)(A) excludes from the safe harbor any forward-looking statement, with or without meaningful cautionary language, that is "included in a financial statement prepared in accordance with generally accepted accounting principles." The court then found that the statements may have been made with scienter because the company ignored red flags that revealed potential financial problems and it violated GAAP in its reporting. Controlling person liability claims also could be viable, concluded the court, because a claim for a primary violation survived.

Baker v. MBNA Corp. (DC Del) will be published in a forthcoming Report.