The U.S. Supreme Court – in a short, concise, unanimous opinion – has ruled that to assert Section 11 claims against Slack in connection with the company’s June 2019 direct listing, the plaintiff must plead and prove that he purchased shares pursuant to Slack’s allegedly misleading registration statement. Slack had offered both registered and unregistered shares in the direct listing. Even though the plaintiff had not alleged that the shares he purchased were registered shares, the Ninth Circuit had allowed the plaintiff’s claims to stand. The Supreme Court vacated the Ninth Circuit’s order and remanded the case to the district court. At a minimum, the Supreme Court’s ruling means Section 11 plaintiffs must plead that their shares are traceable to the offering. The practical implication of the Court’s ruling may be that the companies conducting direct listings cannot be sued under Section 11. A copy of the Court’s June 1, 2023, opinion can be found here.Continue Reading Even in Direct Listing, Section 11 Plaintiff Must Trace Shares to Registration Statement

Joseph Gross

Earlier this week, the U.S. Supreme Court heard oral argument in the Slack case, the  high-profile securities law case the Court is considering this term. In the following guest post, Joseph Gross of the Wiley firm provides a detailed overview of the legal issues in the case and summarizes the parties’ oral arguments. I would like to thank Joe for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Joe’s article.Continue Reading Guest Post: Will the Supreme Court Cut Securities Plaintiffs Some Slack? 

The directors’ and officers’ liability environment is always changing, but 2022 was a particularly eventful year, with important consequences for the D&O insurance marketplace. The past year’s many developments also have significant implications for what may lie ahead in 2023 – and possibly for years to come.  I have set out below the Top Ten D&O Stories of 2022, with a focus on future implications. Please note that on Thursday, January 12, 2023 at 11:00 AM EST, my colleagues Marissa Streckfus, Chris Bertola, and I will be conducting a free, hour-long webinar in which we will discuss The Top Ten D&O Stories of 2022. Registration for the webinar can be found here. I hope you will please join us for the webinar.Continue Reading The Top Ten D&O Stories of 2022

On December 13, 2022, the U.S. Supreme Court granted the petition of Slack Technologies to have the court take up the question of the plaintiff’s standing to pursue ’33 Act liability claims against the company. The standing question arises because the plaintiff bought his Slack shares in connection with the June 2019 transaction in which Slack went public through a direct listing rather than through a traditional IPO. Though the standing questions arises in the relatively narrow context of the company’s direct listing, the standing questions at issue potentially could affect ’33 Act liability claims in other contexts as well. A copy of the U.S. Supreme Court’s December 13, 2022 order in the Slack case can be found here.
Continue Reading Supreme Court Agrees to Take Up Question of ’33 Act Standing in Slack Direct Listing Case