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Second Circuit: Reverse Splits Not Securities Sales

The Second Circuit affirmed the district court's dismissal of Securities Act claims in Knapp v. Barclays PLC, holding that a 4:1 reverse split of exchange-traded notes did not constitute a statutory "sale" under Section 12 of the Securities Act of 1933, and that a supplemental pricing statement was not sufficiently traceable to establish Section 11 liability. The court found that garden-variety reverse splits merely recast the number of securities held and do not bring about the significant changes in investment nature or risk required to qualify as a sale.