SEC, FDA Formalize Disclosure Scrutiny Partnership
A new memorandum of understanding will facilitate SEC access to nonpublic FDA information, increasing enforcement risk for misleading statements by public life-sciences companies.
The U.S. Securities and Exchange Commission (SEC) and the Food and Drug Administration (FDA) have formalized a partnership to share information, signaling a new era of coordinated regulatory oversight for public companies in FDA-regulated industries. Under a new memorandum of understanding (MOU), the SEC can now request and use nonpublic information from the FDA to review company filings and support enforcement investigations into potential securities law violations.
This development is critical for counsel at pharmaceutical, medical device, and other life-sciences companies because it substantially increases enforcement risk. The SEC will now more easily be able to compare a company's private communications with the FDA against its public statements to investors. The MOU specifically targets potentially false or misleading statements about clinical trial results, the status of FDA product reviews, and other regulatory matters that could influence investment decisions. Counsel should advise clients to immediately re-evaluate their disclosure controls and procedures, ensuring that all public communications are rigorously vetted for accuracy and consistency with their regulatory submissions.