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WASHINGTON: U.S. Supreme Court justices on Monday weighed a bid by Salesforce Inc<\/a>'s Slack<\/a> Technologies to avoid a lawsuit over its 2019 direct listing in a case that could undermine the ability of shareholders to sue companies for alleged misstatements when they go public.
The justices heard arguments in an appeal by Slack, which makes workplace communications software, of a lower court ruling that let the proposed class action lawsuit filed by shareholder Fiyyaz Pirani<\/a> for alleged violations of a federal investor protection law proceed. A direct listing is an alternative to a traditional initial public offering.
Questions asked by the justices indicated that even if they side with Slack on part of the case, they may send it back to lower courts to further consider the full scope of Pirani's claims.
Slack contends that Pirani's lawsuit alleging violations of Sections 11 and 12 of a federal law called the Securities Act of 1933 must be dismissed because he cannot prove that he bought registered shares that were specified in the company's allegedly misleading registration statement for the direct listing, rather than shares that were exempt from registration. The registration statement was filed with the U.S. Securities and Exchange Commission (SEC).
Salesforce, a major business software maker, purchased Slack for $27.7 billion in 2021.
The justices seemed open to Slack's view that Section 11 of the Securities Act, which lets plaintiffs sue for falsities in a registration statement if they bought \"such security,\" refers to registered, not unregistered, shares.
\"The statute says, 'such security.' I mean that's the big hurdle for you to get over,\" conservative Chief Justice John Roberts told Pirani's attorney Kevin Russell.
Liberal Justice Elena Kagan told Russell, \"It does seem to me like you have hard row to hoe here.\"
But some justices also seemed hesitant to endorse Slack's view of claims under Section 12 - which focuses on untrue statements in a prospectus that accompanies the sale of a security - saying that there is little case law and the SEC itself has not weighed in on the issue.
\"That strikes me as a big issue for these direct listings and something that I'm not sure we're fully equipped at this moment to chime in on,\" conservative Justice Brett Kavanaugh told Slack's lawyer, Thomas Hungar.
In a direct listing, an approach approved by the SEC in 2018, registered shares and the unregistered shares of early investors in a company are made available to the public at the same time. That differs from an IPO, under which newly registered shares are offered to the public while existing shareholders are typically barred from selling their unregistered shares for months.
Slack's direct listing released 118 million shares that were registered under its registration statement and 165 million pre-existing shares that were exempt from registration.
When Slack's stock price dropped, Pirani sued, alleging the company's registration statement and prospectus contained misstatements about service outages, the credits it promised to pay customers when service was disrupted, and the competition it faced from Teams, Microsoft's rival software.
The San Francisco-based 9th U.S. Circuit Court of Appeals in 2021 rejected Slack's bid to dismiss the case because Pirani cannot prove his shares were registered, saying the argument in the context of a direct listing would \"create a loophole large enough to undermine the purpose of Section 11.\"
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华盛顿:美国最高法院法官周一重了Salesforce公司的松弛技术来避免诉讼案件超过2019个直接上市,可能会削弱股东的起诉公司上市时因涉嫌舞弊行为。
在上诉法官听到参数松弛,使工作场所通信软件,下级法院的裁决,让提出集体诉讼提起的股东Fiyyaz皮拉尼因涉嫌违反联邦法律保护投资者。直接上市是一种替代传统的首次公开募股。
法官表示,即使他们问的问题与松弛的部分情况下,他们可能会将其发送回下级法院进一步考虑电阻的主张的全部范围。
松认为,皮拉尼的诉讼指控违反联邦法律的部分11和12 1933年的证券法案必须被解雇,因为他无法证明他买了注册股份公司涉嫌误导中指定的注册声明直接上市,而不是股票,免除登记。注册声明提交给美国证券交易委员会(SEC)。
Salesforce,一个主要的商业软件制造商,缺口在277亿年以2021美元购买。
法官似乎打开缺口的观点,部分11证券法案,允许原告起诉注册声明中列举了如果他们买了“这样的安全,”指的是注册,不注册,股份。
“法令说,这样安全。“我的意思是,你克服很大的障碍,”保守派的首席大法官约翰罗伯茨告诉皮拉尼的律师凯文·罗素。
自由派大法官埃琳娜•卡根对拉塞尔说,“在我看来像你有硬行锄头在这里。”
但是一些法官似乎也不愿支持疲软的观点下的索赔12节——专注于不实陈述的招股说明书,伴随销售安全——说几乎没有判例法和美国证券交易委员会(SEC)本身并没有发表了意见。
“我认为这是一个大问题对于这些直接上市和一些我不确定我们设备齐全这时插话,“保守派大法官布雷特卡夫劳夫告诉松弛的律师托马斯·Hungar。
直接上市,美国证交会批准,2018年注册股票和未登记的早期投资者在一个公司的股票是向公众提供在同一时间。这不同于IPO,新登记的股票提供给公众,而现有股东通常是禁止出售他们的未注册的股票好几个月了。
松弛的直接清单发布了1.18亿股,在其注册登记声明和1.65亿股的豁免注册。
低迷的股价下跌时,皮拉尼起诉,指控该公司的注册声明和招股说明书包含陈述关于服务中断,学分它承诺支付客户服务中断时,面临的竞争团队,微软的竞争对手软件。
旧金山第九巡回上诉法院在2021年拒绝了松弛的,驳回此案,因为电阻不能证明他的股票登记,说直接上市的上下文中论证将“创造一个漏洞大到足以破坏11节的目的。”
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