Although a number of federal courts have found code of conduct statements to be non-actionable puffery, given the uncertainty in the face of the novel coronavirus pandemic, public companies should review their codes of conduct and revise them if necessary to mitigate litigation risk.
In recent months, securities complaints alleging that a company has made false or misleading statements in or about its code of conduct have been on the uptick. In the wake of Singh v. Cigna Corporation, a 2019 Second Circuit opinion that conclusively found statements in a code of conduct to be non-actionable, plaintiff's counsel have been undeterred. And for good reason: federal courts after Singh have found statements in or about a company's codes of conduct to be material enough to be actionable, including, in some instances, boilerplate aspirational statements generally thought to be textbook puffery. Signet Jewelers Ltd., for example, recently reached a $240 million settlement with plaintiffs in a securities class action after a New York federal judge found that statements in Signet's Code of Conduct could be materially false or misleading.
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Originally published by New York Law Journal
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