Davis Polk partner Marcel Fausten discussed with Law360 the recent unanimous Supreme Court decision in Slack Technologies, LLC v. Pirani, which held that plaintiffs suing under Section 11 of the Securities Act must “trace” their shares to the specific registration statement that they allege was false or misleading, even when they acquired those shares in a direct listing. The Slack decision confirms that Section 11 liability is limited to the shares sold under a given registration statement.

“This is helpful clarity,” Marcel noted. “It removes the uncertainty that followed the Slack litigation.”

High Court Ruling Bolsters Viability Of Direct Listings,” Law360 (June 5, 2023) (subscription required)