Kevin LaCroix recently blogged about the filing of what may be the first securities fraud lawsuit based on allegedly misleading disclosure about the business impact of the Trump administration’s tariff regime. This excerpt summarizes the complaint’s allegations:

On August 29, 2025, a plaintiff shareholder filed a securities class action lawsuit in the Eastern District of Michigan against Dow and certain of its executives. The complaint purports to be filed on behalf of a class of investors who purchased the company’s securities between January 30, 2025, and July 23, 2025.

The complaint alleges that during the class period the defendants failed to disclose that “(i) Dow’s ability to mitigate macroeconomic and tariff-related headwinds, as well as to maintain the financial flexibility needed to support its lucrative dividend, was overstated; (ii) the true scope and severity of the foregoing headwinds’ negative impacts on Dow’s business and financial condition was understated, particularly with respect to competitive and pricing pressures, softening global sales and demand for the Company’s products, and an oversupply of products in the Company’s global markets; and (iii) as a result, Defendants’ public statements were materially false and misleading at all relevant times.”

The complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The plaintiffs seek to recover damages on behalf of the plaintiff class.

I’m sure it won’t come as a shock to readers that Kevin thinks this may be the first of many tariff-related securities lawsuits. President Trump’s unpredictable and ever-evolving approach toward tariffs creates a situation where companies may find themselves facing some unpleasant surprises during any given quarter. Kevin points out that companies should expect plaintiffs to scour prior company statements for optimistic tariff-related comments that they can fashion into allegations of securities fraud.

Our SEC All-Stars panel will have critical insights about tariff-related disclosures during our upcoming Proxy Disclosure & Executive Compensation Conferences to be held in Las Vegas and virtually on October 21-22. Don’t miss out! You can sign up online or reach out to our team to register by emailing info@ccrcorp.com or calling 1.800.737.1271.

– John Jenkins