The 10b-5 Daily

The Shrinking Safe Harbor

The Ninth Circuit in Funko v. Const. Laborers Pension Trust held that a forward‑looking risk disclosure can lose PSLRA safe‑harbor protection when an alleged omission suggests the risk has already materialized. The panel reasoned the disclosure implicitly comments on the present, converting it into a statement of fact subject to an affirmative misrepresentation theory. This creates a novel exception to longstanding precedent that safe harbor applies as long as plaintiffs cannot prove actual knowledge of falsity. The ruling could broaden securities‑fraud exposure for companies’ forward‑looking statements.