News & Analysis as of September 19, 2024

Section 11

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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: Even in a Direct Listing, Section 11 Requires Plaintiffs to Trace Shares to Registration Statement - The Court's...

Jones Day on 6/19/2023

A unanimous Supreme Court has confirmed that a claim brought under section 11 of the Securities Act of 1933 ("1933 Act") requires that a plaintiff plead and prove that the shares purchased were issued pursuant to an allegedly...more

United States Supreme Court Holds That Section 11 Plaintiffs Must Purchase Securities Issued Under the Registration Statement They...

Sheppard Mullin Richter & Hampton LLP on 6/8/2023

In Slack Technologies, LLC v. Pirani, No. 22-200, 2023 U.S. LEXIS 2301 (U.S. June 1, 2023), the Supreme Court of the United States (Gorsuch, J.) held that Section 11 of the Securities Act of 1933 (the “Securities Act”), 15...more

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

Supreme Court Requires Traceability for Securities Act Claims Arising from Direct Listings

Proskauer - Corporate Defense and Disputes on 6/1/2023

The U.S. Supreme Court held that purchasers of shares sold to the public through a direct listing cannot sue under Section 11 of the Securities Act of 1933 unless they can trace their shares to an allegedly defective...more

US Supreme Court to Hear Appeal Regarding Securities Act Claims in Direct Listings

Morgan Lewis on 12/20/2022

The US Supreme Court recently agreed to hear an important appeal of a US Court of Appeals for the Ninth Circuit decision interpreting Sections 11 and 12(a)(2) of the Securities Act of 1933 in the context of a direct stock...more

Securities Litigation Update: Divided Ninth Circuit Permits Direct-Listing Investors to Assert Securities Act Claims, Despite...

Cadwalader, Wickersham & Taft LLP on 11/2/2021

On September 20, 2021, in Pirani v. Slack Technologies, Inc., a divided panel of the U.S. Court of Appeals for the Ninth Circuit held that investors who purchase stock in a “direct listing”—in which pre-existing shares are...more

ETF Plaintiffs Find No Footing For Pursuit Of '33 Act Claims In California Court

Allen Matkins on 1/27/2020

Section 11 of the Securities Act is an anti-fraud statute. Like its Exchange Act cousin, Section 10(b), Section 11 requires (i) an omission or misrepresentation, and (2) that the omission or misrepresentation be material,...more

New York State Court Dismisses Securities Act Claims, Despite Holding That Claims Did Not "Sound In Fraud" And No Heightened...

A&O Shearman on 10/17/2019

On September 26, 2019, Justice Saliann Scarpulla of the New York State Supreme Court, County of New York, Commercial Division, dismissed a putative class action against a dental products and services company and certain of...more

Avoiding Board Observer Liability Under Section 11 of the Securities Act of 1933

Kramer Levin Naftalis & Frankel LLP on 9/12/2019

Lenders and other constituencies will under certain circumstances request and be granted “board observer” rights pursuant to a loan agreement or other contract. The potential legal liability of board observers under various...more

Third Circuit Discusses Important Differences Between Board Observers and Directors

Proskauer - The Capital Commitment on 8/21/2019

The Third Circuit recently issued an important decision for private fund advisors who serve on corporate boards. In a precedential decision on a matter of first impression, the Third Circuit distinguished the role of...more

New York Supreme Court Dismisses Securities Act Of 1933 Claims, Holding That Plaintiffs' Allegations Of Misleading Statements Are...

A&O Shearman on 7/17/2019

On July 11, 2019, Justice Andrew Borrok of the New York State Supreme Court, County of New York, Commercial Division, dismissed a putative securities class action against a Brazilian based online retailer (the “Company”),...more

Chris Lazarini Provides Insight on Pleading Requirements in Securities Fraud Cases

Bass, Berry & Sims PLC on 2/6/2019

Bass, Berry & Sims attorney Chris Lazarini provided insight on a case brought by investors alleging a company violated certain securities laws by issuing a false registration statement in conjunction with its IPO. In the...more

How to Avoid Running a PIPE into Section 5 Problems: A Recent SEC Comment Letter Example

Bass, Berry & Sims PLC on 2/4/2019

An SEC comment letter exchange recently made public serves as a helpful reminder to consider Section 5 of the Securities Act when structuring a PIPE (private investments in public equity) transaction. In a PIPE, a public...more

Chris Lazarini Analyzes Putative Class Action Alleging Violations of Securities Act of 1933

Bass, Berry & Sims PLC on 11/30/2018

Bass, Berry & Sims attorney Chris Lazarini analyzed this putative class action brought against Match Group for alleged violations of the Securities Act of 1933 related to the company’s 2015 initial public offering (IPO)....more

How To Avoid A Section 11 Liability In A Stock-For-Stock Merger

Allen Matkins on 11/16/2018

John Jenkins at DealLawyers.com recently wrote about Section 11 claims being filed in state court by purchasers in stock-for-stock mergers. Section 11 of the Securities Act of 1933 authorizes a cause of action against...more

Chris Lazarini Discusses Burden of Materiality under Section 11 and 12 of Securities Act

Bass, Berry & Sims PLC on 4/19/2017

Bass, Berry & Sims attorney Chris Lazarini discussed the class action suit brought against Party City alleging the company failed to disclose material facts in SEC documents when it did not discuss the impact the decline in...more

One Year Later: Omnicare’s Effect on Opinion Liability

K&L Gates LLP on 3/28/2016

One year ago today, in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, 135 S.Ct. 1318 (2015), the Supreme Court created a new test for opinion liability under Section 11 of the Securities Act,...more

OMNICARE and its Implications

CMCP - California Minority Counsel Program on 11/4/2015

In the spring of this year, the Supreme Court issued its long-awaited decision in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, 135 S.Ct. 1318 (2015), resolving a circuit split regarding the...more

After Omnicare: Opinion Statement Liability in SEC Registrations

Carlton Fields on 6/22/2015

The U.S. Supreme Court in March provided important guidance on the support required for expressions of opinion or belief in registration statements. In Omnicare, Inc. v. Laborers District Council Construction Industry Pension...more

Liability for Statements of Opinion–New Clarity from the Supreme Court

Parker Poe Adams & Bernstein LLP on 5/27/2015

The U.S. Supreme Court’s recent decision in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund resolved a clear split in the federal courts of appeal regarding when statements of opinion may give...more

Implications of the U.S. Supreme Court Omnicare Decision

Wilson Sonsini Goodrich & Rosati on 4/23/2015

On March 24, 2015, the U.S. Supreme Court issued its decision in Omnicare, Inc., et al. v. Laborers District Council Construction Industry Pension Fund, et al., addressing when an issuer may be held liable for material...more

Corporate Investigations & White Collar Defense - April 2015

Manatt, Phelps & Phillips, LLP on 4/22/2015

It’s Stifling in Here! SEC Rules That Companies Can’t Put Restrictive Language in Confidentiality Agreements That Could Potentially Stifle Whistleblowers - Why it matters: On April 1, 2015, the SEC announced its...more

Three Top Considerations After Omnicare

Dechert LLP on 4/22/2015

In Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, 575 U. S. ____ (2015), the Supreme Court clarified issuer liability under §11 of the Securities Act. Section 11 provides that issuers are...more

United States Supreme Court Resolves Circuit Split Regarding Section 11 Claims Predicated Upon Allegedly Misleading Statements of...

Sheppard Mullin Richter & Hampton LLP on 4/6/2015

In Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, No. 13-435, 2015 WL 1291916 (U.S. Mar. 24, 2015), the United States Supreme Court addressed the circumstances under which a claim alleging...more

Omnicare and the "Reasonable Investor" Standard for Statements of Opinion

BakerHostetler on 4/3/2015

On March 24, 2015, the U.S. Supreme Court unanimously decided the closely followed case of Omnicare v. Laborers District Council Construction Industry Pension Fund concerning liability for false statements of opinion made in...more

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Securities Act of 1933 › Registration Statement › Section 11

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