The SEC has announced that “Tandy” representations will no longer be required as part of its review process. The elimination of these requirements is consistent with the goals of the SEC’s ongoing disclosure effectiveness initiative. While the SEC staff will cease to require the rote recitation of these superfluous representations, the disclosure standards themselves—and issuers’ potential liability for a failure to meet those standards—remain unchanged.
The SEC staff has long required issuers responding to staff comments on a filing to acknowledge that (i) the issuer is responsible for the accuracy and adequacy of its disclosure, (ii) the conclusion of the review process does not foreclose further action from the SEC with respect to the filing, and (iii) the issuer may not assert the staff review process as a defense in any legal proceeding. The elimination of Tandy representations does not, however, change the underlying principle that issuers remain responsible for their disclosure, and the staff indicated that going forward it will include a reminder of this principle in its comment letters.