John is joined by Jesse Bernstein, Partner in Quinn Emanuel’s New York Office and Co-Chair of the Securities Litigation Practice. Jesse explains that the term “securities” applies not only to stocks and bonds, but arguably to any situation where a group of investors place their resources into a common entity where they expect to make profits from the efforts of others. He describes the sources of securities law, including state blue sky laws, the Securities Act of 1933 (which focuses on initial issuances), the Securities Exchange Act of 1934 (which focuses on intentional misrepresentations in securities transactions and the Private Securities Litigation Reform Act of 1995 (which sought to curb perceived abuses in securities litigation by raising the pleading standards required to establish scienter and creating a safe harbor for forward looking statements). They discuss the Supreme Court’s recent ruling in Moab Partners v. Macquarie Infrastructure that pure omissions of material fact are not actionable under Rule 10(b)(5) because the rule only covers affirmative misstatements. Jesse then explains how a Quinn Emanuel team obtained a jury verdict last year in Elon Musk’s favor in a rare securities class action trial on a $12 billion claim based on Mr. Musk’s tweet about taking Tesla private. He describes the arguments made concerning materiality and loss causation that ultimately led to the victory. Finally, they discuss upcoming issues in securities law including how the Macquarie decision will impact cases.
Podcast Link: Law-disrupted.fm
Host: John B. Quinn
Producer: Alexis Hyde
Music and Editing by: Alexander Rossi