Slack Technologies, LLC v. Pirani (22-200)
argument 22-200Slack Technologies, LLC v. Pirani
Supreme Court of the United States
1h 10m
7 speakers
8 chapters
transcribed 7 days ago
official recording ↗
Transcript
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Transcript generated automatically by AI and may contain errors.
How does Section 11 define “such security” and its connection to registration statements?
Gar. Chief Justice, and may it please the Court. Sections eleven and twelve of the thirty-three Act expressly reference and enforce the registration statement and prospectus requirements imposed by Section five of the Act, fifteen USC seventy seven E. In construing the term such security, therefore, it's appropriate to look to the meaning of that same term as used in section five, the source of the prohibitions enforced by sections eleven and twelve, and it's undisputed that such security in section five consistently refers only to shares that are subject to registration, never to exempt shares. Such security in sections eleven and twelve should be given the same meaning. That reading is confirmed by this Court's decision in Gustavson, which held that it is more reasonable to interpret the liability provisions of the thirty three Act.
as providing remedies for violations of the obligations it had created, not as imposing liabilities independent of the substantive obligations of the Act. Respondents' contrary interpretation would run roughshod over the core statutory distinction between registered and exempt shares, which is fundamental to the structure and operation of the thirty three Act. and it would dramatically expand the scope of liability, disrupt the capital formation process, And upset settled expectations by overturning decades of case law and SEC interpretation consistently holding that plaintiffs must prove they purchased registered shares. Respondent can't identify a single case in the 90-year history of the Securities Act imposing Section 11 liability on exempt shares.
Congress, despite revisiting the Act numerous times over the for years has been content to leave the law that way. This Court should reject respondents' attempt to overturn that long settled understanding. I welcome the Court's questions.
Uh you mentioned ninety year history, but have we had direct listing before? I mean that seems to be what's causing the problem.
We haven't had direct listing before, Your Honor, but certainly there are other circumstances, and it is undisputed that there are many other circumstances in which the tracing requirement, given the modern operation of the securities markets, is difficult or sometimes impossible for plaintiffs to satisfy. But that has not led Congress to change the law, and it has not led the SEC to adopt any of the possible mechanisms it could adopt to address that concern if it felt it should do. So
You mentioned the uh tracing requirement. Um the um Could you speak a little bit uh about where that comes from and why there's a a tracing requirement?
Well, so fundamentally there is no doubt that Congress intended and required there to be tracing and expected tracing would be required.
Each year, as opposed to simply saying there is registration and uh as a result of that the stocks are being sold.
Because of because the the again the the core distinction in the act is between shares that are registered and shares that aren't. So for instance, putting aside the issues in this case, Section twelve A one, which i is creates a cause of action for unregistered shares. In order to prevail on that cause of action, a plaintiff obviously has to prove that they purchased unregistered shares, not registered shares. That's been in the Act from the beginning. So there's no doubt. that Congress knew that plaintiffs would be required to trace, the same is true under sections eleven and twelve A two for all the reasons that we've articulated.
Finally uh the um Why uh do you think that eleven and twelve rise and fall t together?
We do and and this Court's decision in Gustison uh I think makes that same point. The the the a core rationale of the Court's decision in Gustison, as I said, is that the the liability provisions imposed by sections eleven and twelve should be construed uh co e extensively with the obligations they enforce. The obligations they enforce arise under Section five, which imposes uh an obligation to register particular securities, the shares that that have to be registered, and requires a prospectus to be delivered only in connection with particular s securities, lame namely registered.
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Chapters
8 chapters
1
How does Section 11 define “such security” and its connection to registration statements?
0:01–9:04
2
Why do the parties argue that Section 12 A2 should apply only to public offerings and not to exempt shares?
9:04–18:22
3
What is the significance of the Gustavson decision for interpreting Sections 11 and 12?
18:22–26:46
4
How do the parties explain the tracing requirement and its practical challenges in a direct listing?
26:46–35:35
5
Why does the respondent claim that the SEC’s position supports liability for exempt shares?
35:35–43:16
6
What arguments are made about Congress’s intent regarding Section 3 and Section 4 exemptions?
43:16–51:08
7
How do the Justices question the possibility of a burden‑shifting framework for Section 11 claims?
51:08–1:00:45
8
What relief do the petitioners seek and how do they propose the Court should rule on the case?
1:00:45–1:10:01