This educational guide is based on the linked primary sources. It is not a Court publication, is not affiliated with the Court, and is not legal advice.
In brief
Overview
The case centers on whether liability under Sections 11 and 12 of the 1933 Securities Act applies only to shares issued pursuant to a registration statement.
The district court denied Slack’s motion to dismiss the complaint and certified the ruling for interlocutory appeal.
Background and question before the Court
What each side argues
Petitioners (Slack Technologies)
Slack argues that Sections 11 and 12 authorize suit only for holders of shares issued pursuant to a false or misleading registration statement, and Pirani’s complaint fails to allege such traceable shares.
Respondents (Kevin K. Russell)
According to Respondent (Kevin K. Russell), according to Respondent (Kevin K. Russell), accordingly, the better view is that "such security" in Section 11 refers to all of the shares in the public offering for which the registration statement was a prerequisite.
According to Respondent (Kevin K. Russell), according to Respondent (Kevin K. Russell), exceedingly burdensome not only for the parties but also for the courts and the juries who are going to have to determine the registration status of perhaps millions of individual shares of stocks and on the third parties who will be subject to discovery, the -- the brokers, the share depositories, in order to engage in this -- this exercise.
According to Respondents, clearly, an exempt security is a security.
According to Respondents, there is this question of --of, you know, can Congress or the SEC fix this? Certainly, I think there would be something to fix because, again, the practical consequence of adopting Petitioners' position, I think, is inevitably going to open the door to this -- their strategem of letting in a few exempt shares, even in traditional IPOs, and arguing that, therefore, you have to trace. And that's generally going to be impossible.
Plaintiff (Fiyyaz Pirani)
Pirani argues that “such security” should be read to include securities not directly traceable to a defective registration statement but having a minimal relationship to it, allowing his case to proceed.
What happened at oral argument
Justice Thomas asked whether there had been a direct listing before.
According to Justice Jackson, justice Jackson inquired whether a prospectus could be a separate document from a registration statement.
Justice Kavanaugh asked whether the Court of Appeals should decide whether the registration statement was forfeited.
According to Justice Gorsuch, justice Gorsuch sought clarification on the “traceability” requirement of Section 11.
What the Court decided
The Court vacated the Ninth Circuit’s judgment and remanded for the district court to determine whether Pirani’s pleadings satisfy Section 11(a) as properly construed.
Why it matters
The interpretation of “such security” is relevant to liability for shares in direct listings and exempt offerings, which the parties argue could affect future securities offerings.
Terms to know
No glossary terms are available for this guide.
Primary sources
Read the source materials on the official site or open the immutable repository copy used for this guide.
- 8d149559d651c8bf054e-r1-c58e1b7c61a65c49.pdfopinion
- cc73ce4a754d653dcd66-r1-14d8144526f80686.pdforal argument transcript
Guide generated September 29, 2026. Automated validation accepted this version.