Eric Petzschke v. Century Aluminum Company

Section 11 of the Securities Act of 1933, 15 U.S.C. § 77k, provides a cause of action to any person who buys a security issued under a materially false or misleading registration statement. Plaintiffs need not have purchased shares in the offering made under the misleading registration statement; those who purchased shares in the aftermarket have standing to sue provided they can trace their shares back to the relevant offering. Hertzberg v. Dignity Partners, Inc., 191 F.3d 1076, 1080 (9th Cir.1999); Lee v. Ernst & Young, LLP, 294 F.3d 969 , 978 (8th Cir.2002). When all of a company’s shares have been issued in a single offering under the same registration statement, this “tracing” requirement generally poses no obstacle. Hertzberg, 191 F.3d at 1082 . But when a company has issued shares under more than one registration statement, the plaintiff must prove that her shares were issued under the allegedly false or misleading registration statement, rather than some other registration statement. Id. at 1080 n. 4.

This case involves the latter scenario. Plaintiffs purchased shares in defendant Century Aluminum Company at the end of January 2009. In March 2009, shortly after…