Safe Harbor Statement

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What is a Safe Harbor Statement? Meaning.

A Safe Harbor Statement is a legal provision found in business documents such as annual reports and press releases that excuses or diminishes liability if the attempt to comply in good faith can be demonstrated.

At the end of many annual reports, you can find this legal stipulation that establishes a reduction or elimination of liability on the basis that the report was made in good faith. Especially for forward looking statements it is very important that investors are properly warned for key risk factors that can affect the accuracy of the statement.

The Sarbanes-Oxley Act of 2002 requires corporations to provide more detailed financial information to investors. Also, the Chief Executive Officer and the Chief Financial Officer must attest to the accuracy of the financial report and to the internal control systems.

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