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U.S. Supreme Court to Take on Major Securities Cases this Term

This term the U.S. Supreme Court will consider at least three securities industry cases, according to commentary from lawyers at Paul, Weiss Rifkind, Wharton & Garrison LLP. The first case raises the question of whether state courts have subject matter jurisdiction over class actions as defined in the Securities Litigation Uniform Standards Act of 1998 (“SLUSA”) for claims arising only under the 1933 Act. In the case to be argued Cyan, Inc. v.Beaver County Employees Retirement Fund, plaintiffs alleged that the registration statement and prospectus filed in conjunction with Cyan’s 2013 IPO contained misleading and inaccurate statements in violation of the 1933 Act. Cyan moved to dismiss the case, arguing that a California court lacked subject matter jurisdiction under SLUSA. The second case to be heard, Digital Realty Trust, Inc.v.Somers,explores whether the whistleblower protections of the Dodd-Frank Act extend to individuals who report alleged misconduct only within their organizations, and do not report the alleged wrongdoing to the SEC. In the third case, Leidos, Inc. v. Indiana Public Retirement Systemthe Supreme Court will consider whether omission of a required disclosure is actionable under Section 10(b) of the Exchange Act of 1934 and SEC Rule 10b-5.