17 C.F.R. § 229.103

(Item 103) Legal proceedings

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(a) Describe briefly any material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which the registrant or any of its subsidiaries is a party or of which any of their property is the subject. Include the name of the court or agency in which the proceedings are pending, the date instituted, the principal parties thereto, a description of the factual basis alleged to underlie the proceedings and the relief sought. Include similar information as to any such proceedings known to be contemplated by governmental authorities. Information may be provided by hyperlink or cross-reference to legal proceedings disclosure elsewhere in the document, such as in Management's Discussion & Analysis (MD&A), Risk Factors and notes to the financial statements.

(b) No information need be given under this section for proceedings:

(1) That involve negligence or other claims or actions if the business ordinarily results in such claims or actions, unless the claim or action departs from the normal kind of such claims or actions; or

(2) That involve primarily a claim for damages if the amount involved, exclusive of interest and costs, does not exceed 10 percent of the current assets of the registrant and its subsidiaries on a consolidated basis. However, if any proceeding presents in large degree the same legal or factual issues as other proceedings pending or known to be contemplated, the amount involved in such other proceedings shall be included in computing such percentage.

(c) Notwithstanding paragraph (b) of this section, disclosure under this section shall include, but shall not be limited to:

(1) Any material bankruptcy, receivership, or similar proceeding with respect to the registrant or any of its significant subsidiaries;

(2) Any material proceedings to which any director, officer or affiliate of the registrant, any owner of record or beneficially of more than five percent of any class of voting securities of the registrant, or any associate of any such director, officer, affiliate of the registrant, or security holder is a party adverse to the registrant or any of its subsidiaries or has a material interest adverse to the registrant or any of its subsidiaries;

(3) Administrative or judicial proceedings (including proceedings which present in large degree the same issues) arising under any Federal, State, or local provisions that have been enacted or adopted regulating the discharge of materials into the environment or primarily for the purpose of protecting the environment. Such proceedings shall not be deemed “ordinary routine litigation incidental to the business” and shall be described if:

(i) Such proceeding is material to the business or financial condition of the registrant;

(ii) Such proceeding involves primarily a claim for damages, or involves potential monetary sanctions, capital expenditures, deferred charges or charges to income and the amount involved, exclusive of interest and costs, exceeds 10 percent of the current assets of the registrant and its subsidiaries on a consolidated basis; or

(iii) A governmental authority is a party to such proceeding and such proceeding involves potential monetary sanctions, unless the registrant reasonably believes that such proceeding will result in no monetary sanctions, or in monetary sanctions, exclusive of interest and costs, of less than $300,000 or, at the election of the registrant, such other threshold that (A) the registrant determines is reasonably designed to result in disclosure of any such proceeding that is material to the business or financial condition is disclosed, (B) the registrant discloses (including any change thereto) in each annual and quarterly report, and (C) does not exceed the lesser of $1 million or one percent of the current assets of the registrant and its subsidiaries on a consolidated basis; provided, however, that such proceedings that are similar in nature may be grouped and described generically.

[85 FR 63760, Oct. 8, 2020]

Notes of Decisions

Cited in 32 cases (4 in the last 5 years), 1987–2024 · leading case: In re Lions Gate Ent. Corp. Sec. Litig., 165 F. Supp. 3d 1 (S.D.N.Y. 2016).

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In re Lions Gate Ent. Corp. Sec. Litig., 165 F. Supp. 3d 1 (S.D.N.Y. 2016). · cites it 5× “The plaintiffs contend that the securities filings omitted disclosures required under three sections of SEC Regulation S-K: 17 C.F.R. §§ 229.103 (“Item 103”), 229.303(a)(3)(ii) (“Item 303”), and 229.”

City of Philadelphia v. Fleming Companies, Inc., 264 F.3d 1245 (10th Cir. 2001). · cites it 4× “For guidance on this question, we look to 17 C.F.R. § 229.103 , which requires companies to report pending litigation meeting certain criteria relating to materiality.”

In Re Fuwei Films Sec. Litig., 634 F. Supp. 2d 419 (S.D.N.Y. 2009). · cites it 2× “” 17 C.F.R. § 229.103 (emphasis added). In elaborating on what constitutes a “material” pending legal proceeding, Item 103 further provides that: No information need be given with respect to any proceeding that involves primarily a claim for damages if the amount involved,…”

Jaroslawicz v. M&T Bank Corp, 962 F.3d 701 (3rd Cir. 2020). “17 CFR § 229.103 . So the “risk factors” requiring disclosure under Item 105 are separate from legal risks under Item 103.”

Celia Greengrass v. Int'l Monetary Sys., 776 F.3d 481 (7th Cir. 2015). “See 17 C.F.R. § 229.103 (1982). In March 2008, IMS’s Treasurer and CFO, Danny Weibling, consulted with an outside accountant, Derek Webb, regarding whether Greengrass’s EEOC complaint needed to be mentioned in the company’s SEC filings.”

New Jersey &, Div. Of Invest. v. Sprint Corp., 314 F. Supp. 2d 1119 (D. Kan. 2004). · cites it 3× “15 In that regard, plaintiffs contend that Item 103 of Regulation S-K, 17 C.F.R. § 229.103 , which concerns the disclosure of pending or contemplated legal proceedings, required defendants to disclose that the SEC had reviewed the unwinding of the option exercises and that the…”

City of Roseville Employees' Ret. Sys. v. Energysolutions, Inc., 814 F. Supp. 2d 395 (S.D.N.Y. 2011). “” 17 C.F.R. § 229.103 . Administrative proceedings “arising under any Federal .”

Wielgos v. Commonwealth Edison Co., 688 F. Supp. 331 (N.D. Ill. 1988). · cites it 4× “Item 103 governs disclosure of legal proceedings ( 17 C.F.R. § 229.103 ): Describe briefly any material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which the registrant.”

Richman v. Goldman Sachs Grp., Inc., 868 F. Supp. 2d 261 (S.D.N.Y. 2012). “” 17 C.F.R. § 229.103 . Section 240.12b-20 “supplements Regulation S-K by requiring a person who has provided such information in ‘a statement or report .”

Bolger v. First State Fin. Servs., 759 F. Supp. 182 (D.N.J. 1991). · cites it 3× “17 C.F.R. § 229.103 . See also GAF Corp. v.”

United States v. Crop Growers Corp., 954 F. Supp. 335 (D.D.C. 1997). · cites it 2× “The regulations governing corporate disclosures are set forth at 17 C.F.R. § 229.103 . 13 See Form S-l, Item 11(c).”

John Doe Co. No. 1 v. Consum. Fin. Prot. Bureau, 195 F. Supp. 3d 9 (D.D.C. 2016). “” 17 C.F.R. § 229.103 . But nothing in the securities laws—standing alone—requires affirmative disclosure of an inchoate government investigation, That is, contrary to the CFPB’s argument here, it is not the fact of an incomplete investigation itself that gives rise to the duty…”

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