![]() Moreover, the SEC has reiterated in light of the COVID-19 crisis the importance of maintaining market integrity and adhering to corporate controls and procedures, particularly with respect to material nonpublic information and insider trading. Among other restrictions, if a company procures a loan under the CARES Act, that company and its affiliates are prohibited from buying back the company’s public stock (unless contractually obligated to do so prior to the enactment of the CARES Act), until one year after the loan is repaid. This alert addresses the questions surrounding share repurchases that companies should consider as they evaluate the advantages, disadvantages, legal implications and strategic considerations of share repurchases in a turbulent market.Īs a preliminary matter, any company contemplating a share repurchase should consider the limitations set forth within the Coronavirus Aid, Relief and Economic Security Act, passed into law on Ma(the CARES Act). In light of the recent downturn and increased volatility in the global financial markets attributable to the continued proliferation of COVID-19, a number of companies have raised questions regarding the best practices and desirability of repurchasing shares at reduced market prices.
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