Pirani v. Slack Technologies, Inc.
United States Court of Appeals for the Ninth Circuit
13 F.4th 940 (2021)
The New York Stock Exchange (NYSE) implemented a new rule that allowed companies to go public through a direct listing upon filing a registration statement with the Securities and Exchange Commission (SEC). Under the new rule, a company going public through a direct listing in lieu of an initial public offering via an investment bank meant that the company’s shareholders need not be forced into a lock-up period that barred the sale of unregistered shares to the public. Slack Technologies, Inc. (Slack) (defendant) filed a registration statement and simultaneously sold millions of registered and unregistered shares of stock to the public through a direct listing. Fiyyaz Pirani (plaintiff) purchased shares of Slack stock on the day of the direct listing and purchased additional shares in the ensuing months. Pirani could not know whether the purchased shares were registered or unregistered. Slack’s stock price subsequently fell. Pirani filed a class action against Slack, alleging that Slack’s registration statement contained inaccuracies and misled investors who bought both registered and unregistered shares of Slack stock. The district court determined that Pirani had standing to sue under § 11 of the Securities Act of 1933. Slack appealed.
Rule of Law
Holding and Reasoning (Restani, J.)
Dissent (Miller, J.)
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