Freshworks, Investor Dispute Recovery for Some Stock Declines

Freshworks Inc. and an investor each told the Ninth Circuit the Securities Act is clear about a shareholder’s ability to recover for losses when the stock price remains above the offering price.

But the software company and Mohan Sundaram view the meaning of that “clear” provision in opposite ways.

Section 11(e) of the Securities Act of 1933 “expressly limits recovery to declines that occur below the offering price,” Freshworks told the US Court of Appeals for the Ninth Circuit on Thursday.

That means Sundaram, who bought above the initial public offering price and seeks to recover for price declines that ...