The stakes, after all, are high for both investors and companies that want to tap the capital markets. Slack and its supporters contend that the 9th Circuit upended market expectations by ditching the longstanding “tracing requirement” that Securities Act plaintiffs must show that their shares were sold under the auspices of the misleading registration statement. Investors, meanwhile, argue that courts cannot allow companies to evade Securities Act liability by offering the public a mix of registered and unregistered shares.
The Biden administration has nothing to say on the matter.
The solicitor general’s office did not submit an amicus brief for either Slack or lead investor Fiyyaz Pirani. The deadline has now passed, which means that the Supreme Court will decide the fate of the tracing requirement in Securities Act class actions without hearing from the Justice Department or the SEC.
‘Enforcement 40’ for 2020
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