Supreme Court Requires Traceability for Direct Listing Section 11 Claims

Actions brought under Sections 11 and/or 12(a)(2) require that the relevant securities transaction can be linked to a specific registration statement containing misstatements or omissions. Recently the U.S. Supreme Court vacated a Ninth Circuit decision allowing an action arising out of a direct listing of securities to continue, even though the plaintiff did not show that the securities they bought were linked to the registration statement at issue. Read this article for details about the action, the Ninth Circuit’s reasoning, and the Supreme Court’s decision.

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