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    Home /  Insights /  Memos, Newsletters And Alerts /  Memo
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    U.S. Supreme Court Adopts Narrow Reading of Liability Under the Securities Act of 1933

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    June 5, 2023

    Court Unanimously Holds That Only Shareholders Who Purchased Shares Directly Traceable To A Registration Statement Containing Alleged Misrepresentations May Pursue Section 11 Claims

    On June 1, 2023, the U.S. Supreme Court held in Slack Technologies, LLC, et al. v. Pirani that Section 11 of the Securities Act of 1933, which imposes strict liability on issuers for materially false or misleading registration statements, only applies to securities issued pursuant to the registration statement in question.  In doing so, the Court rejected a decision by the U.S. Court of Appeals for the Ninth Circuit that Section 11 liability may also extend to other shares, and joined the majority of lower federal courts, including every Court of Appeals to consider the issue before the Ninth Circuit’s opinion.

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