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Abstract: 

The Supreme Court has agreed to hear an appeal in Pirani v. Slack Technologies, Inc., a case where the Ninth Circuit rejected Defendants’ argument that the SEC’s recent rule change allowing a company to issue both registered and unregistered shares simultaneously when going public prevents any investor from bringing claims under the Securities Act of 1933 on the grounds that the judicially created “tracing” requirement cannot be satisfied. The authors caution that a reversal of the Ninth Circuit’s decision could weaken significantly, and perhaps even vitiate, investors’ rights to challenge misrepresentations made in connection with IPOs and other public offerings—rights that have existed since 1933.

Keywords: Pirani v. Slack Techs., Inc.; Direct Listing IPOs

Affiliations:  1: Bernstein Litowitz Berger & Grossmann LLP; 2: Bernstein Litowitz.