In The National Law Journal, Jeremiah Williams Discusses Slack’s Shareholder Case at the U.S. Supreme Court

A securities-related lawsuit involving the direct listing method in which messaging platform, Slack, communicated its plans to go public had U.S. Supreme Court justices split on liability, the interpretation and linking of Securities Act Sections 11 and 12, and the relevance of the ’33 Act.

In The National Law Journal, litigation & enforcement partner Jeremiah Williams noted the justices seemed “uncomfortable” viewing Sections 11 and 12 as linked.

“From a strictly legal view, and this is a statutory interpretation case, you can see why [Sections 11 and 12] shouldn’t go together because they have different language,” Jeremiah said.

The benefit of a direct listing is the liquidity made available by the process. Direct listing allows early shareholders to sell their shares unregistered, leading to both registered and unregistered shares available to the market. Jeremiah said if the court sides with the shareholder, it could add to a tracing burden the process currently skirts.

“If there are some shares that don’t have this cause of action, it can have significant legal impacts,” he said, predicting a possible reduction in direct listings if the court finds liability under both sections.