1 (Slip Opinion) OCTOBER TERM, 2022

Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337. 

## SUPREME COURT OF THE UNITED STATES

Syllabus

SLACK TECHNOLOGIES, LLC, FKA SLACK

TECHNOLOGIES, INC., ET AL

. v

. PIRANI

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

No. 22–200. Argued April 17, 2023—Decided June 1, 2023
This case arises from a public offering of securities governed by the Se

curities Act of 1933, and the issue presented is what a public buyer must allege to state a claim under §11 of the Act. The 1933 Act re

quires a company to register the secu rities it intends to offer to the public with the Securities an d Exchange Commission. See, e.g., 15 U. S. C. §§77b(a)(8), 77e; see also §77d. As part of that process, a com

pany must prepare a registration statement that includes detailed in

formation about the firm’s business and financial health so prospective buyers may fairly assess whether to invest. See, e.g., §§77f, 77g, 77aa. The law imposes strict liability on issuing companies when their reg

istration statements contain material misstatements or misleading omissions. In this case, Slack Technologies—a technology company that offers a platform for instant messaging—conducted a direct listing to sell its shares to the public on the New York Stock Exchange in 2019. As part of that process, Slack filed a registration statement for a spec

ified number of registered shares it intended to offer in its direct list

ing. Under the direct listing process, holders of preexisting unregis

tered shares in Slack were free to se ll them to the public right away. Slack’s direct listing offered for purchase 118 million registered shares and 165 million unregistered shares. Fiyyaz Pirani bought 30,000 Slack shares on the day Slack went public, and later bought 220,000 additional shares. When the stock price dropped, Mr. Pirani filed a class-action lawsuit against Slack alleging, as relevant here, that Slack had violated §11 of the 1933 Act by filing a materially misleading registration statement. Slack move d to dismiss, arguing that the com

plaint failed to state a claim under §11 because Mr. Pirani had not alleged that he purchased shares traceable to the allegedly misleading2 SLACK TECHNOLOGIES, LLC v. PIRANI

Syllabus

registration statement, leaving open the possibility that he purchased shares not registered by means of the registration statement. The dis

trict court denied the motion to dismiss but certified its ruling for in

terlocutory appeal. The Ninth Circuit accepted the appeal and a di

vided panel affirmed.
Held : Section 11 of the 1933 Act requires a plaintiff to plead and prove

that he purchased securities registered under a materially misleading registration statement. The relevant language of §11(a) authorizes an individual to sue for a material misstatement or omission in a regis

tration statement when the individual has acquired “such security.” Slack argues the term “such security” refers to a security issued pur

suant to the allegedly misleading registration statement; Mr. Pirani says that the term may encompass a security not registered under an allegedly misleading registration statement. While the word “such” usually refers to something that has already been described, there is no clear referent in §11(a) defining what “such security” means. As a result, the Court must ascertain the statute’s critical referent “from the context or circumstances.” Context provides several clues. First, the statute imposes liability for false statements or misleading omissions in “ the registration state

ment.” §77k (emphasis added). Th e statute uses the definite article to reference the particular registration statement alleged to be mis

leading, and in this way seems to su ggest the plaintiff must “acquir[e] such security” under that document’s terms. Ibid . In addition, the statute repeatedly uses the word “such” to narrow the law’s focus—for example, referring to “such part” of the registration statement that contains a misstatement or mislea ding omission—suggesting that when it comes to “such security,” the law speaks to a security regis

tered under the particular registration statement alleged to contain a falsehood or misleading omission. Section 6 of the statute indicates that a registration statement is “effective” for “only . . . the securities specified therein,” which is also hard to square with Mr. Pirani’s read

ing. Damages caps in the statute also make less sense with Mr. Pi

rani’s account of the statute. Collectively, these contextual clues per

suade the Court that Slack’s reading of the law is the better one. While direct listings like the one here are ne w, the Court’s conclusion is not. The majority of courts have for year s held that §11(a) liability extends only to shares that are traceable to an allegedly defective registration.

Resisting this conclusion, Mr. Pi rani argues that the Court should read the phrase “such security” to include not only securities registered under a defective registration statement but also other securities that bear some sort of minimal relationsh ip to a defective registration state

ment. Mr. Pirani contends that but for the existence of Slack’s regis

tration statement for the registered shares, its unregistered shares3 Cite as: 598 U. S. ____ (2023)

Syllabus

would not have been eligible for sale to the public. But Mr. Pirani does not explain what the limits of his rule would be, how the Court might derive them from §11, or how any of this can be squared with the var

ious contextual clues identified whic h suggest that liability runs with registered shares alone. Mr. Pira ni argues that if Congress wanted liability under §11(a) to attach only to securities issued pursuant to a particular registration statement, it could have borrowed language from §5 to achieve that result. On its own terms, that argument also shows that Congress could have written §11(a) to explain more clearly that liability attaches to “any security” or “any security” bearing some specified relationship to a registrati on statement. Finally, Mr. Pirani argues that adopting a broader reading of “such security” would ex

pand liability for falsehoods and misleading omissions and thus better accomplish the purpose of the 1933 Act. The Court cannot endorse that sort of reasoning. Nor is Mr. Pirani’s account of the law’s purpose altogether obvious; an alternate infe rence in the opposite direction is at least equally plausible. In any ev ent, the Court’s function is to dis

cern and apply existing law. The Court concludes that the better read

ing of §11 requires a plaintiff to plead and prove that he purchased shares traceable to the allegedly defective registration statement, and remands for the Ninth Circuit to cons ider that question in the first instance. Pp. 5-10. 13 F. 4th 940, vacated and remanded.

G ORSUCH , J., delivered the opinion for a unanimous Court._________________

_________________ 1 Cite as: 598 U. S. ____ (2023)

Opinion of the Court

NOTICE: This opinion is subject to formal revision before publication in the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the Unit ed States, Washingt on, D. C. 20543, pio@supremecourt.gov , of any typographical or other formal errors. 

## SUPREME COURT OF THE UNITED STATES

No. 22–200

SLACK TECHNOLOGIES, LLC, FKA SLACK TECH

NOLOGIES, INC., ET AL ., PETITIONERS v. FIYYAZ PIRANI

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

[June 1, 2023]

J USTICE G ORSUCH delivered the opinion of the Court. This case concerns the meaning of one provision of the federal securities laws. Fo r many years, lower federal courts have held that liability under §11 of the Securities Act of 1933 attaches only when a buyer can trace the shares he has purchased to a false or misleading registration state

ment. Recently, the Ninth Circuit parted ways with these decisions, holding that a pl aintiff may sometimes recover under §11 even when the shares he owns are not traceable to a defective registration stat ement. The question we face is which of these approaches best conforms to the statute’s
terms.

I Together, the Securities Act of 1933, 48 Stat. 74, 15 U. S. C. §77a et seq., and the Securities Exchange Act of 1934, 48 Stat. 881, 15 U. S. C. §78a et seq. , form the back

bone of American securities law. The first is “ ‘narrower’ ” and focused “ ‘primarily’ ” on the regulation of new offerings. Gustafson v. Alloyd Co. , 513 U. S. 561, 572 (1995) (quoting Blue Chip Stamps v. Manor Drug Stores , 421 U. S. 723, 7522 SLACK TECHNOLOGIES, LLC v. PIRANI

Opinion of the Court
(1975)). Generally speaking, the 1933 Act requires a com

pany to register the securities it intends to offer to the pub

lic with the Securities and Exchange Commission (SEC). See, e.g., 15 U. S. C. §§77b(a)(8), 77e; see also §77d. As part of that process, a company must prepare a registration statement that includes detailed information about the firm’s business and financial health so prospective buyers may fairly assess whether to invest. See, e.g., §§77f, 77g, 77aa. The law imposes strict liability on issuing companies when their registration statements contain material mis

statements or misleading omissions. §77k; see also Herman & MacLean v. Huddleston , 459 U. S. 375, 380 (1983). The 1934 Act sweeps more broadly. Among other things, it requires publicly traded co mpanies to provide ongoing disclosures and regulates trading on secondary markets. See, e.g., §§78m, 78o; T. Hazen, Federal Securities Law 99– 102 (4th ed. 2022) (Hazen). This law’s main liability provi

sion sweeps more broadly too. It allows suits in connection with the purchase or sale of “any security,” whether regis

tered or not. §78j(b); see also 17 CFR §240.10b–5 (2022); Herman & MacLean , 459 U. S., at 382. But to prevail under this provision, a plaintiff must prove that any material mis

leading statement or omission was made “with scienter, i.e.

, with intent to deceive, manipulate, or defraud.” Id ., at 382. This case arises from a public offering governed by the 1933 Act. Typically, when a company goes public it issues new shares pursuant to a registration statement. That reg

istration statement is filed with the SEC and made availa

ble to the public. Investment banks underwrite the offer

ing, usually by buying these new registered shares at a negotiated price and then selling them to investors at a higher price. In this way, underwriters often carry the risk of loss should they fail to sell the shares at a profit. See 1 L. Loss, J. Seligman, & T. Paredes, Securities Regulation 738–748 (6th ed. 2019); Hazen 32–33. Of course, a company’s early investors and employees3 Cite as: 598 U. S. ____ (2023)

Opinion of the Court
may own preexisting shares. Often, too, these shares are not subject to registrati on requirements. See, e.g., 15 U. S. C. §77d(a)(2) (exempting, among other things, trans

actions “not involving any public offering”); 17 CFR §230.144(a)(3)(i) (recognizing as exempt certain securities “acquired directly . . . from the issuer . . . in a transaction or chain of transactions not involving any public offering”); Hazen 60–61. To prevent the stock price from falling once public trading begins, underwri ters may require insiders to consent to a “lockup agreement”—a commitment to hold their unregistered shares for a period of time before selling them on the new public market . See 1 J. Bartlett, Equity Finance: Venture Capital, Buyouts, Restructurings and Re

organizations §14.8, p. 333 (2d ed. 1995). Initial public offerings (IPOs) are an effective way of rais

ing capital, but they also have drawbacks. Among other things, they can involve significant transaction costs. Nor is raising capital the only reason firms might wish to go public; some may simply wish to afford their shareholders (whether investors, employees , or others) the convenience of being able to sell their existing shares on a public ex

change. See 73 Fed. Reg. 54442 (2008). Several years ago, a number of companies approached the New York Stock Ex

change (NYSE) about the possibility of selling shares pub

licly on that exchange without an IPO. Ibid . Ultimately, the NYSE proposed rules to facilitate and regulate these “direct listings,” which the SEC approved with modifica

tions. 83 Fed. Reg. 5650 (2018). Slack is a technology company that offers a platform for instant messaging. It conducted a direct listing on the NYSE in 2019. Pirani v. Slack Technologies, Inc ., 13 F. 4th 940, 944, 947 (CA9 2021). As part of that process, Slack filed a registration statement for a specified number of reg

istered shares it intended to offer in its direct listing. Pi

rani v. Slack Technologies, Inc ., 445 F. Supp. 3d 367, 373 (ND Cal. 2020). But because Slack employed a direct listing4 SLACK TECHNOLOGIES, LLC v. PIRANI

Opinion of the Court
rather than an IPO, there was no underwriter and no lockup agreement. 13 F. 4th, at 951 (Miller, J., dissenting). Accordingly, holders of preexisting unregistered shares were free to sell them to the public right away. See ibid

. All told, Slack’s direct list ing offered for purchase 118 mil

lion registered shares and 165 million unregistered shares. Fiyyaz Pirani bought 30,000 Slack shares on the day Slack went public. He bought 220,000 additional shares over the next few months. When the stock price later dropped, Mr. Pirani filed a class-action lawsuit against Slack. In that suit, he alle ged that Slack had violated §§11 and 12 of the 1933 Act by filing a materially misleading reg

istration statement. Ibid. Slack moved to dismiss the co mplaint for failure to state a claim. Sections 11 and 12, Slack argued, authorize suit only for those who hold shares issued pursuant to a false or misleading registration statement. And this feature of the law, the company said, was dispositive in this case because Mr. Pirani had not alleged that he purchased shares trace

able to the allegedly misleading registration statement. For all anyone could tell, he may have purchased unregis

tered shares unconnected to the registration statement and its representations about the firm’s business and financial health. Of course, Slack woul d go on to acknowledge that the 1934 Act allows investors to recover for fraud in the sale of unregistered shares upon proof of scienter. But, the com

pany emphasized, Mr. Pirani had not sought to sue under that law. Ultimately, the district court denied the motion to dis

miss but certified its ruling for interlocutory appeal. 445 F. Supp. 3d, at 381, 384–385. The Ninth Circuit accepted the appeal and a divided panel affirmed. 13 F. 4th, at 945, 950. In dissent, Judge Miller argued that §§11 and 12 of the 1933 Act require a plaintiff to plead and prove that he purchased securities registered under a materially mislead

ing registration statement, something Mr. Pirani had not5 Cite as: 598 U. S. ____ (2023)

Opinion of the Court

done. Id ., at 951–952. Judge Miller pointed out that a long line of lower court cases have interpreted §11 as applying only to shares purchased pursuant to a registration state

ment. Id ., at 952. Because the Ninth Circuit’s decision cre

ated a split of authority in the courts of appeals about §11’s scope, we granted certiorari. 598 U. S. ___ (2022). 1

II We begin with the relevant language of §11(a) of the 1933 Act. It provides: “In case any part of the registration statement, when such part became effective, contained an untrue state

ment of a material fact or omitted to state a material fact required to be stated th erein or necessary to make the statements therein not misleading, any person ac

quiring such security (unless it is proved that at the time of such acquisition he knew of such untruth or omission) may, either at law or in equity, in any court of competent jurisdiction, sue [certain enumerated par

ties].” 15 U. S. C. §77k(a).

The statute authorizes an individual to sue for a material misstatement or omission in a registration statement when he has acquired “such security.” The question we face is what this means. Does the te rm “such security” refer to a security issued pursuant to th e allegedly misleading regis

tration statement? Or can the term also sometimes encom

pass a security that was not issued pursuant to the alleg

edly misleading registration statement? Slack advances the first interpretation; Mr. Pirani defends the second.

——————

1 The parties have litigated this case on the premise that Slack was not required to register all of the shares sold in its direct listing. For the first time before this Court, Mr. Pirani challenges that premise, suggesting that it was incumbent on Slack to regi ster all the securities sold in its direct listings on the NYSE. Brief for Respondent 11–12, n. 7. As he acknowledges, however, th is issue is not properly presented for decision, ibid. , and so we do not pass upon it.6 SLACK TECHNOLOGIES, LLC v. PIRANI

Opinion of the Court
Immediately, we face a bit of a challenge. The word “such” usually refers to something that has already been “described” or that is “implied or intelligible from the con

text or circumstances.” Conc ise Oxford Dictionary of Cur

rent English 1218 (1931); see also Webster’s New Interna

tional Dictionary 2518 (2d ed. 1954). But there is no clear referent in §11(a) telling us what “such security” means. As a result, we must ascertain the statute’s critical referent “from the context or circumstances.” As it turns out, context provides several clues. For one thing, the statute imposes liability for false statements or misleading omissions in “ the registration statement.” §77k (emphasis added). Not just a registration statement or any registration statement. The st atute uses the definite article to reference the particular registration statement alleged to be misleading, and in this way seems to suggest the plain

tiff must “acquir[e] such security” under that document’s
terms. Ibid

. For another thing, the statute repeatedly uses the word “such” to narrow the law’s focus. The statute directs us to “such part” of the registration statement that contains a misstatement or misleading omission. It speaks of “such acquisition” when a person has acquired securities pursu

ant to the registration statement. And it points to “such untruth or omission” found in the registration statement. Each time, the law trains our view on particular things or statements. All of which suggests that, when it comes to “such security,” the law speaks to a security registered un

der the particular registration statement alleged to contain a falsehood or misleading omission. Other provisions in the 1933 Act follow suit. Under §5, for example, “[u]nless a registra tion statement is in effect as to a security,” it is unlawful “to sell such security.” §77e(a). Here, the term “suc h security” clearly refers to shares subject to registration. Meanwhile, §6 provides that a “registration statement shall be deemed effective only as7 Cite as: 598 U. S. ____ (2023)

Opinion of the Court
to the securities specified therein as proposed to be offered.” §77f(a). It’s an instruction that would seem hard to square with Mr. Pirani’s broader reading of §11(a)—after all, adopting that reading would give the registration state

ment effect (in the sense of creating liability) for securities that are not “specified” in the registration statement “as proposed to be offered.” Beyond these clues lies still another. Section 11(e) caps damages against an underwriter in a §11 suit to the “total price at which the securities underwritten by him and dis

tributed to the public were offered to the public.” §77k(e). This provision thus ties the maximum available recovery to the value of the registered shares alone. It’s another fea

ture that makes little sense on Mr. Pirani’s account, for if §11(a) liability extended beyond registered shares presum

ably available damages would too. See Barnes v. Osofsky

, 373 F. 2d 269, 272 (CA2 1967); Brief for SEC as Amicus Cu

riae in Barnes v. Osofsky , No. 30867 etc. (CA2), pp. 4–5. Collectively, these contextual clues persuade us that Slack’s reading of the law is the better one. Nor is anything we say here particularly novel. For while direct listings are new, the question how far §11(a) liability extends is not. More than half a century ago, Judge Friendly addressed the question in an opinion for the Second Circuit in Barnes and concluded that “the narrower read ing” we adopt today is the more “natural” one. 373 F. 2d, at 271, 273. Since Barnes

, every court of appeals to consider the issue has reached the same conclusion: To bring a claim under §11, the securities held by the plaintiff must be traceable to the particular reg

istration statement alleged to be false or misleading. 2 Until

——————

2 See, e.g., In re Ariad Pharmaceuticals, Inc. Securities Litigation , 842 F. 3d 744, 755–756 (CA1 2016); Rosenzweig v. Azurix Corp ., 332 F. 3d 854, 873 (CA5 2003); Lee v. Ernst & Young, LLP , 294 F. 3d 969, 976–977 (CA8 2002); Joseph v. Wiles , 223 F. 3d 1155, 1159 (CA10 2000), abrogated on other grounds, California Public Employees’ Retirement System v.8 SLACK TECHNOLOGIES, LLC v. PIRANI

Opinion of the Court
this decision, even the Ninth Circuit seemed to take the same view. Hertzberg v. Dignity Partners, Inc. , 191 F. 3d 1076, 1080, and n. 4 (1999). Resisting this conclusion, Mr. Pirani argues that we should read the phrase “such security” to include not only securities traceable to a defecti ve registration statement. We should also read the phrase to include other securities that bear some sort of minimal relationship to a defective registration statement. And, he argues, a reading like that would allow his case to proceed because, but for the exist

ence of Slack’s registration statement for the registered shares, its unregistered shares would not have been eligible for sale to the public. Brief for Respondent 22–23. Beyond assuring us that the rule he proposes would save his case, however, Mr. Pirani does not offer much more. He does not explain what the limits of his rule would be, how we might derive them from §11, or how any of this can be squared with the various contextual clues we have encountered sug

gesting that liability runs with registered shares alone. Perhaps the closest Mr. Pirani comes to answering these questions comes when he directs us to §5. If Congress wanted liability under §11(a) to attach only to securities is

sued pursuant to a particular registration statement, he ob

serves, it could have simply borrowed similar language from §5. That provision, he stresses, speaks of “any security with respect to which a registration statement has been filed.” §77e(b)(1). But even taken on its own terms, this argument does not prove much. If Mr. Pirani’s example shows that Congress could have written §11(a) to explain more clearly that liability attach es only to securities issued pursuant to a particular registration statement, it also shows that Congress could have written §11(a) to explain more clearly that liability attach es to “any security” or “any

—————— ANZ Securities, Inc. , 582 U. S. 497 (2017); APA Excelsior III L. P. v. Premiere Technologies, Inc. , 476 F. 3d 1261, 1271 (CA11 2007).9 Cite as: 598 U. S. ____ (2023)

Opinion of the Court
security” bearing some specified relationship to a registra

tion statement. That Congress could have been clearer, no one disputes. But none of this proves it adopted anything like the rule Mr. Pirani proposes. Finally, Mr. Pirani argues from policy and purpose. Adopting a broader reading of “such security” would, he says, expand liability for falsehoods and misleading omis

sions and thus better accomplish the purpose of the 1933 Act. We cannot endorse this line of reasoning. This Court does not “presume . . . that any result consistent with [one party’s] account of the statute’s overarching goal must be the law.” Henson v. Santander Consumer USA Inc. , 582 U. S. 79, 89 (2017). Nor, for that matter, is Mr. Pirani’s ac

count of the law’s purpose altogether obvious. As we have seen, the 1933 Act is “limited in scope.” Herman & MacLean , 459 U. S., at 382. Its main liability provision imposes strict liability on issuers for material falsehoods or mislead

ing omissions in the registration statement. Ibid. Mean

while, the 1934 Act requires ongoing disclosures for publicly traded companies and its main liability provision allows suits involving any sale of a security but only on proof of scienter. Ibid .; Hazen 99–100. Given this design, it seems equally possible that Congre ss sought a balanced liability regime that allows a narrow cl ass of claims to proceed on lesser proof but requires a higher standard of proof to sus

tain a broader set of claims.

III Naturally, Congress remains free to revise the securities laws at any time, whether to address the rise of direct list

ings or any other development. Our only function lies in discerning and applying the law as we find it. And because we think the better reading of the particular provision be

fore us requires a plaintiff to plead and prove that he pur

chased shares traceable to the allegedly defective registra

tion statement, we vacate the Ninth Circuit’s judgment10 SLACK TECHNOLOGIES, LLC v. PIRANI

Opinion of the Court
holding otherwise. Whether Mr. Pirani’s pleadings can sat

isfy §11(a) as properly construed, we leave for that court to decide in the first instance on remand. 3

It is so ordered.

——————

3 As we noted at the outset, the partie s do not just spar over the best interpretation of §11 and its applicatio n to this case. They do the same when it comes to §12. See Part I, supra . But we have no need to reach the merits of that particular disput e. The Ninth Circuit said that its decision to permit Mr. Pirani’s §12 claim to proceed “follow[ed] from” its analysis of his §11 claim. 13 F. 4t h 940, 949 (2021). And because we find that court’s §11 analysis flawed, we th ink the best course is to vacate its judgment with respect to Mr. Pirani’s §12 claim as well for reconsidera

tion in the light of our holding today about the meaning of §11. In doing so, we express no views about the prop er interpretation of §12 or its ap

plication to this case. Nor do we endorse the Ninth Circuit’s apparent belief that §11 and §12 necessarily travel together, but instead caution that the two provisions contain distinct language that warrants careful consideration.