Second Circuit Clarifies Scope of Liability for Securities Act Claims

In a matter of first impression, the Second Circuit recently affirmed the district court’s dismissal of Securities Act claims in Knapp v. Barclays PLC, No. 25-1631, 2026 WL 806009 (2d Cir. Mar. 24, 2026). The court concluded that (1) a reverse split did not constitute a “sale” under Section 12 of the Securities Act of 1933, and (2) a supplemental pricing statement was not sufficiently traceable to establish Section 11 liability. This holding cabins the scope of Securities Act liability and... By: Katten Muchin Rosenman LLP