Following the settlement of a highly anticipated case set for argument before the U.S. Supreme Court this term, litigants continue to wait for clarity on an important issue concerning cases brought under the Securities Act of 1933 in state court.

The Private Securities Litigation Reform Act (PSLRA) indisputably provides for a stay of discovery in cases brought in federal court alleging disclosure violations under the Securities Act during the pendency of a motion to dismiss. However, although the PSLRA provides that this discovery stay should apply in “any private action” brought under the Securities Act, the stay has not uniformly been applied in actions brought in state court. The importance of this split of authority continues to grow in the wake of the U.S. Supreme Court’s 2018 ruling that state courts have concurrent jurisdiction over claims brought under the Securities Act, Cyan v. Beaver County Employees Retirement Fund, 138 S. Ct. 1061 (2018), which has caused a dramatic increase in plaintiffs filing these claims in state court.

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