![]() The question before the justices was whether Section 11 liability applies to all of the purchases or instead only to the purchases of registered shares. Often, as in this case, there is a registration statement, because other provisions of the securities laws obligate some, but not all, of those shareholders to register their shares before selling them. Rather, shareholders sell theirpreexisting shares into the public securities market. In recent years, some companies (including Slack Technologies, the defendant in this case) have experimented with a different process, a “direct listing” in which Slack itself sells no shares. Traditionally, the process of going public for a young company involves filing a registration statement with the SEC that describes shares that the company will issue and sell in an initial public offering on the public securities markets. The justices ruled on Thursday that the provision permits lawsuits only by those who purchased the securities registered under that statement. That provision imposes liability for false or misleading material in a statement registering securities with the Securities and Exchange Commission. Pirani rejected a lower-court ruling that had substantially broadened liability for publicly traded companies under Section 11 of the Securities Act of 1933. OPINION ANALYSIS Justices limit suits challenging misleading securities registration statements By Ronald Mann on at 3:08 pmĪs expected, Thursday’s decision in Slack Technologies v. Board of Education for SC case (Jessica Holdman, The Post and Courier) ![]()
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