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FASB retreats from disastrous litigation disclosure requirement proposal

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Since July 2008, we've been warning about dangerous proposals from the Financial Accounting Standards Board to change its Standard No. 5, and require financial disclosures about litigation that (1) would provide roadmaps to plaintiffs' lawyers already suing publicly-traded defendants; (2) create collateral opportunities for litigation for alleged failure to meet the standard; and (3) to avoid such collateral litigation, force defensive disclosures that would depress the stock price while litigation was pending and deter meritorious defenses against litigation. Alison Frankel informs us that FASB has finally dropped the proposal. [Reuters]

1 Comment

Does all of this pertain to Asbestos exposure?

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


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The Manhattan Insitute's Center for Legal Policy.