## Facts

- SS&C Technologies, Inc. conducted an initial public offering of common stock underwritten by Alex. Brown & Sons Inc. and Hambrecht & Quist LLC.
- Purchasers of SS&C common stock sued SS&C, certain officers and directors, and the underwriters for alleged misstatements or omissions in offering materials.
- Lead plaintiffs bought SS&C shares between May 31, 1996 and August 1, 1996 and sought to represent a class of purchasers during that period.
- The proposed class included (i) IPO purchasers, (ii) purchasers from underwriters in the aftermarket within a period when a prospectus was still required to be delivered, and (iii) purchasers in the aftermarket from third parties.
- The complaint asserted claims under Securities Act §§ 11 and 12(a)(2) and Exchange Act § 10(b) and Rule 10b-5; the certification dispute centered on the Securities Act claims.

## Issues

1. Whether a proposed class asserting Securities Act § 11 and § 12(a)(2) claims may include aftermarket purchasers, rather than only purchasers in the initial distribution.
2. Whether the proposed class representatives satisfied Rule 23(a)’s typicality and adequacy requirements.
3. Whether Rule 23(b)(3)’s predominance and superiority requirements were met.

## Decision

- The court granted the motion for class certification.
- It held the class need not be limited to IPO purchasers for § 11 purposes; aftermarket purchasers could be included if their shares were traceable to the allegedly defective registration statement.
- The court rejected defendants’ effort to treat the posture (class certification rather than a motion to dismiss) as a basis to limit the class on standing grounds.
- The court found the proposed representatives met Rule 23(a)’s typicality and adequacy requirements.
- The court concluded Rule 23(b)(3) was satisfied because common questions predominated and a class action was the superior method for adjudicating the claims.

## Legal Principles

- Section 11 standing is not limited to direct purchasers from the issuer or statutory seller; any purchaser may sue if the purchased securities can be traced to the offering covered by the challenged registration statement.
- At class certification, the inclusion of aftermarket purchasers does not, by itself, make a Securities Act class definition improper where traceability is plausibly implicated.
- Typicality is satisfied when representatives’ and class members’ claims arise from the same alleged course of conduct and rest on the same legal theory, despite differences in purchase mechanics (IPO versus aftermarket).
- Adequacy requires aligned interests between representatives and the class and competent counsel capable of litigating the action.
- Predominance and superiority under Rule 23(b)(3) are met where alleged misstatements or omissions in uniform offering materials present common questions that outweigh individualized issues, and class treatment efficiently resolves numerous related claims.

## Conclusion

The court certified a securities class arising from an IPO, holding that the proposed class could include certain aftermarket purchasers for Securities Act claims where their shares were traceable to the IPO registration statement, and finding Rule 23(a) and Rule 23(b)(3) satisfied.


Feiner v. SS&C Techs., Inc., 47 F. Supp. 2d 250 (D. Conn. 1999)