Slack Technologies Fails to Shuck Misleading Registration Suit

A proposed class action by Slack Technologies Inc. shareholders who allegedly were misled by its securities registration statement can continue because their direct listing purchases can be traced to the statement, the Ninth Circuit said Monday.

The case presented the court with a question of first impression, as it deals with a new rule that allows securities to be sold widely through direct listings, rather than initial public offerings.

In an IPO, a company issues new shares under a registration statement that registers those securities with the Securities and Exchange Commission. Investment banks help companies sell the shares, but also ...