Securities,
U.S. Supreme Court
Jun. 29, 2023
Public interest in the wake of Slack Technologies, Inc. v. Pirani
Because no new money is generated, direct listings are not a frequently used technique for going public. Yet even if the strategy is rarely employed, adequate investor protection is no less paramount and investors trading in available securities should be able to rely on a company's publicly filed disclosures.
While the U.S. Supreme Court's recent ruling in Slack Technologies, Inc. v. Pirani may be good news for public companies - reducing their potential liability to stockholders in the case of direct listings - the decision leaves a major loophole and resulting exposure for investors acquiring stock in direct listings, where both registered and unregistered securities are available for purchase by the public.
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