Vanderbilt Law Review

First Page



A corporation's use of forward-looking corporate statements' is a common, arguably essential, element of the landscape of modern financial markets. Unfortunately, the failure to meet the expectations created by forward-looking statements often serves as the basis for a potentially devastating private action for securities fraud. Before Congress responded to frivolous private securities fraud class actions with the Private Securities Litigation Reform Act of 1995, ("Reform Act") the judiciary took it upon itself to provide relief to burdened corporations. In doing so, the courts focused on the materiality of the corporation's statements, an essential building block in the plaintiffs construction of a viable private securities fraud suit. These courts developed two principal means by which a corporate defendant could seek dismissal of such suits as a matter of law: the Bespeaks Caution Doctrine and the Corporate Puffery Defense.