On April 17, 2023, the Supreme Court held oral argument in Slack Techs. LLC v. Pirani—a case regarding standing under Sections 11 and 12(a)(2) of the Securities Act of 1933 (the “’33 Act”) that is being closely watched by the D&O bar. The Court will decide whether plaintiffs bringing these claims after buying stock through a direct listing need to prove that they bought registered shares in order to assert that the registration statement and prospectus were misleading. Until a recent Ninth Circuit decision, plaintiffs were typically required to prove purchase of registered shares in order to assert these claims. The Supreme Court seemed inclined to reverse the Ninth Circuit and require that Section 11 plaintiffs prove the purchase of registered shares, though the Justices were sympathetic to the policy implications of such position. However, much of the argument focused on Section 12(a)(2), notwithstanding that the two provisions are typically lumped together. The Supreme Court will issue a decision by the end of June.
Source: Guest Post: Will the Supreme Court Cut Securities Plaintiffs Some Slack? | The D&O Diary