Inside The Courts – An Update From Skadden Securities Litigators - May 2026

SPOTLIGHT

Guidance on Guidance Claims Featured in Securities Litigation

This article was originally published February 19, 2026, in Reuters.

Contributing Partners: Virginia Milstead and Mark Foster

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When a public company’s stock price declines significantly, securities class action litigation may follow. One common trigger for such lawsuits is a company missing or lowering its financial guidance. Recent studies show that guidance claims are on the rise, with at least one in four securities claims predicated, in part, on allegations related to a shortfall of prior expectations.

Given the frequency of these claims, it is useful for public companies to be aware of the types of claims that may be asserted and to consider, in consultation with their advisors, general practices that may help address litigation risk associated with so-called guidance claims. This article is intended to provide a high-level overview of the legal landscape and does not prescribe any particular