Does a trust beneficiary's allegations that a trustee used trust assets to buy and sell the trustee's own proprietary securities for the trustee's own pecuniary gain constitute misconduct 'in connection with' the purchase or sale of a covered security under SLUSA?

QUESTION PRESENTED Congress first sought to curb abusive federal securities litigation through the Private Securities Litigation Reform Act of 1995 (“PSLRA”), 15 U.S.C. §§ T7z-1, 78u-4. The PSLRA imposed new requirements on class action lawsuits involving federally-regulated securities, such as a heightened pleading standard, an automatic stay of discovery during the pendency of any motion to dismiss, and a cap on damages. Because the PSLRA only applied to federal claims, however, plaintiffs began evading its procedural safeguards by bringing securities class actions under state law instead. This led Congress to enact the Securities Litigation Uniform Standards Act of 1998 (“SLUSA”), 15 U.S.C. §§ 77p(b), 78bb(f)(1). Congress intended for SLUSA to ensure uniform application of federal securities law standards to class action lawsuits by precluding class action claims under state law alleging deceptive conduct in connection with a transaction involving federally-regulated securities. The question presented for review is: For purposes of SLUSA, does a trust beneficiary allege misconduct “in connection with” the purchase or sale of a covered security when the beneficiary alleges that the trustee used trust assets to buy and sell the trustee’s own proprietary securities rather than competitors’ securities and did so for the trustee’s own pecuniary gain?