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October 5, 2016

Solicitor General may weigh in on Jurisdiction in Federal Securities Lawsuits

The U.S. Supreme Court has asked the U.S. solicitor general “to weigh in on whether it should take a case challenging if federal securities law prevents state court jurisdiction in shareholder lawsuits based solely on federal law.”

The case in question was brought in 2014 by the Beaver County Employees Retirement Fund, the Retirement Board of Allegheny County and the Delaware County Employees Retirement System against Cyan, Inc.

“The class action, pending before California Superior Court in San Francisco, alleges that Cyan failed to adequately inform investors in initial public offering documents that revenues were dependent on two limited projects that were winding down,” reports Pensions & Investments. “A California appeals court rejected Cyan’s federal pre-emption argument and allowed the lawsuit to proceed in state court.”

The U.S. Chamber is among groups petitioning the Supreme Court to reconsider the case.

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