Tag: reasonable baisis for projections

SEC enforcement action for materially misleading projections in the face of red flags and other actions

In case anyone needed a reminder from the SEC, this case against Sonus Networks, its CFO and VP of Sales may well serve as one: per the SEC’s Associate Director of Enforcement, a company needs to have a “reasonable basis” if it makes public projections or estimates about future financial results:  “The investing community expects that when companies choose to provide public financial projections, there is a reasonable basis underpinning those projections….When a company ignores red flags or takes steps to make public financial projections inaccurate we will take appropriate action.”