News & Analysis as of September 21, 2024

Supreme Court of the United States

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The Securities Act of 1933 is a United States federal statute enacted in response to the stock market crash of 1929 and the ensuing Great Depression. The Act has two primary purposes: 1) to give investors better access to material information prior to investing 2) ensure that transactions are not based on fraud. In order to effectuate its dual goals, the Act requires that any offer or sale of securities is registered with the SEC. less -

Litigation developments: federal forum provisions

Supreme Court Slack Decision Confirms Narrow Interpretation of Section 11 Claims

Latham & Watkins LLP on 6/7/2023

The unanimous opinion requires shareholder plaintiffs to plead and prove that they purchased shares traceable to an allegedly false or misleading registration statement. On June 1, 2023, the US Supreme Court issued its...more

Securities and Derivative Litigation: Quarterly Update

Dechert LLP on 2/9/2023

In 2022, there were 197 federal securities class actions filed, which is a slight drop from the 211 filings in 2021, and a significant drop from the over 400 filings in 2017, 2018, and 2019, and over 300 in 2020. There were...more

Securities and Derivative Litigation: Quarter 4 Update

Dechert LLP on 2/7/2023

In 2022, there were 197 federal securities class actions filed, which is a 6.6% drop from the 211 filings in 2021, and a significant drop from the over 400 filings in 2017, 2018, and 2019, and over 300 in 2020. Despite a...more

“We lost. Sorry everyone”: The Implications of a District Court Finding Digital Token, LBC, Is a Security

Mintz - Securities Litigation Viewpoints on 11/21/2022

Crypto litigation, fueled by a surge of investors and market volatility, has ballooned in recent years. For example, numerous securities class actions and government subpoenas followed the May 2022 collapse of the $60 billion...more

Supreme Court to Decide Whether Discovery Stays Apply to State-Court Securities Lawsuits This Fall

Proskauer - Corporate Defense and Disputes on 8/18/2021

One of the most significant differences between bringing a securities lawsuit in state versus federal court is the application of the mandatory discovery stay set forth in the Private Securities Litigation Reform Act (the...more

In the Wake of the Pandora’s Box Opened by the Supreme Court’s Cyan Decision, Court to Address Discovery Stay Question in State...

Seyfarth Shaw LLP on 7/14/2021

On July 2, 2021, the US Supreme Court granted the Petition for a Writ of Certiorari filed in Pivotal Software, to address one of the many questions stemming from the Court’s decision in Cyan, which permitted state courts to...more

Exclusive Federal Forum Selection Provisions for Securities Act Claims Held to be Valid in Delaware

Troutman Pepper on 3/23/2020

On March 18, in Salzberg v. Sciabacucchi, No. 346, 2019, the Delaware Supreme Court held that Delaware corporations may validly adopt forum selection provisions requiring that all claims arising under the federal Securities...more

U.S. Chamber Of Commerce's Institute Of Legal Reform Publishes Report On "Broken Securities Class Action System" And Proposes...

A&O Shearman on 3/5/2019

On February 25, 2019, the U.S. Chamber of Commerce’s Institute of Legal Reform (the “ILR”) published a report entitled “Containing the Contagion: Proposals to Reform the Broken Securities Class Action System” (the “Report”)....more

Skadden's 2019 Insights: Securities Class Action Filings Show No Signs of Abating

Skadden, Arps, Slate, Meagher & Flom LLP on 1/18/2019

As anticipated, securities class action filings remained high in 2018, with more than 400 filings in federal court, and the number is expected to remain high in 2019. While the total number is slightly less than in 2017, it...more

Delaware Court of Chancery Invalidates Forum Selection Provisions Regulating Claims Under the Securities Act of 1933

Skadden, Arps, Slate, Meagher & Flom LLP on 12/22/2018

On December 19, 2018, the Delaware Court of Chancery held that forum selection provisions contained in the certificate of incorporation of Delaware corporations are invalid to the extent that they require any claim under the...more

U.S. District Court Holds that Certain Claims by Opt-Out Plaintiffs Are Barred by the Statute of Repose

Mintz - Securities Litigation Viewpoints on 10/10/2018

In a recent ruling in In re: BP p.l.c. Securities Litigation the United States District Court for the Southern District of Texas dismissed claims asserted by opt-out plaintiffs as time barred by the Exchange Act’s statute of...more

SCOTUS Keeps Door Open for Federal-Law, State-Court Securities Class Actions. Where Does This Leave Katz?

Foley & Lardner LLP on 10/1/2018

In Cyan, Inc. v. Beaver County Employees Retirement Fund, No. 15-1439 (Mar. 20, 2018), the Supreme Court recently held that certain federal securities-law claims could proceed in state courts—despite the narrowing effect of...more

Can the SEC Eradicate The Distinction Between Primary and Secondary Liability?

Dorsey & Whitney LLP on 6/22/2018

“The distinction between primary and secondary liability matters...For decades...the SEC has tried to erase that distinction...” Lorenzo v. SEC, 872 F. 3d 578, 601 (D.C. Cir. 2017) (Kavenaugh, Circuit Judge, dissenting). ...more

Skeptical of Elephants in Mouseholes and Monster Arguments, the Supreme Court Holds Plaintiffs Can Still File 1933 Act Securities...

Butler Snow LLP on 5/9/2018

On March 20, 2018, the United States Supreme Court released its unanimous decision in Cyan, Inc. v. Beaver County Employees Retirement Fund, 138 S.Ct. 1061 (2018). In Cyan, the Court considered whether plaintiffs can file...more

The Doors of State Courthouses Remain Open to Class Action Plaintiffs with Federal Securities Act of 1933 Claims Related to...

Moore & Van Allen PLLC on 4/30/2018

In 2017, federal securities class actions were filed at a rapid clip, averaging more than one per day – a level not seen in nearly 20 years according to survey data. It was the third year of growth and a 44% increase over...more

IPOs and Registered Offerings Beware – Supreme Court Decision Risks Increased Lawsuits in State Courts

Bass, Berry & Sims PLC on 4/5/2018

On March 20, 2018, a unanimous United States Supreme Court, in Cyan, Inc. v. Beaver Cty. Employees Ret. Fund, No. 15-1439, 2018 WL 1384564, answered two questions concerning investors' ability to pursue alleged violations of...more

Supreme Court Rules That Securities Act Class Actions May Proceed in State Court

Fenwick & West LLP on 4/5/2018

The U.S. Supreme Court has ruled that class action plaintiffs can bring claims under the Securities Act of 1933 in either state or federal court. ...more

Race to the State Courthouse?: How the Ruling in Cyan Changes Where and How Securities Actions Are Fought

BakerHostetler on 4/4/2018

On March 20, 2018, the Supreme Court unanimously ruled in Cyan, Inc. v. Beaver County Employees Retirement Fund, No. 15-1439, that securities plaintiffs could bring class actions under the Securities Act of 1933 (“Securities...more

Supreme Court in Cyan Upholds State Court Securities Act Class Actions

Kramer Levin Naftalis & Frankel LLP on 4/3/2018

In Cyan, Inc. v. Beaver County Employees Retirement Fund, No. 15-1439, decided on March 20, 2018, the Supreme Court unanimously held that class actions based solely on the Securities Act of 1933 (33 Act) may be brought in...more

Supreme Court's Cyan Decision Means Open Season for Investor Class Actions After IPOs

Troutman Pepper on 3/30/2018

The U.S. Supreme Court issued a unanimous decision on March 20 holding that investors are free to file securities class action lawsuits challenging the veracity of stock registration statements under Section 11 of the...more

Supreme Court Rules on State Court Jurisdiction over Securities Act Lawsuits

Jones Day on 3/29/2018

In recent years, plaintiffs increasingly have challenged initial public offerings by filing securities class actions in state courts, especially California, due to an unsettled jurisdictional question. In Cyan, Inc. v. Beaver...more

SCOTUS: Pure ‘33 Act Class Actions Not Removable Under SLUSA

Burr & Forman on 3/28/2018

A unanimous Supreme Court recently held that “covered class actions” over exchange-traded securities are not removable from state courts under SLUSA when they assert only ‘33 Act claims....more

U.S. Supreme Court Holds In Cyan That SLUSA Does Not Divest State Courts Of Jurisdiction Over Federal Securities Act Claims And...

A&O Shearman on 3/27/2018

On March 20, 2018, the Supreme Court of the United States, in a unanimous decision delivered by Justice Kagan, ruled that state courts have jurisdiction to adjudicate class actions brought under the Securities Act of 1933...more

Issuers Face Changing Litigation Landscape, Challenges Due to Supreme Court Ruling

Mintz on 3/27/2018

In a boon for public company shareholder plaintiffs this week, the U.S. Supreme Court upheld state courts’ concurrent jurisdiction over securities class actions alleging violations of certain federal securities laws. The...more

U.S. Supreme Court Confirms State Courts Can Resolve Covered 1933 Act Class Actions

Perkins Coie on 3/23/2018

On Tuesday, a unanimous U.S. Supreme Court held that state courts have jurisdiction to hear “covered” class-action claims under the Securities Act of 1933 (1993 Act), and that defendants may not remove such claims to federal...more

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Securities Act of 1933 › Class Action › Supreme Court of the United States

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