Whether the fraud-on-the-market presumption established in Basic Inc. v. Levinson applies to minority shareholders in a freeze-out merger who did not actively trade shares at market price but were subject to a merger transaction

No question identified. : APPLICATION FOR EXTENSION OF TIME TO FILE A PETITION FOR A WRIT OF CERTIORARI To: Justice Sonia Sotomayor, Circuit Justice for the Second Circuit: Under this Court’s Rules 13.5 and 22, Applicants Shanda Games Limited, Yingfen Zhang, Li Yao, Lijun Lin, Heng Win Chan, Yong Gui, Shaolin Liang, and Danian Chen respectfully request an extension of sixty (60) days to file a petition for a writ of certiorari in this case. The petition will seek review of the U.S. Court of Appeals for the Second Circuit’s decision in In re Shanda Games Limited Securities Litigation, 128 F.4th 26 (2d Cir. 2025). A copy of the decision is attached. App. A. A copy of the Second Circuit’s April 25, 2025, order denying rehearing and rehearing en banc is also attached. App. B. In support of this application, Applicants state: 1. The Second Circuit issued its decision in this case on February 3, 2025. App. A, at 1. On April 25, 2025, the Second Circuit denied rehearing and rehearing en banc. App. B. A petition for a writ of certiorari would be due July 24, 2025. See S. Ct. R. 13.1, 138.3. Granting this 60-day extension would make the petition due on September 22, 2025. The jurisdiction of this Court would be invoked under 28 U.S.C. § 1254(1). 2. This case involves the proper interpretation of this Court’s decision in Basic Inc. v. Levinson, 485 U.S. 224 (1988), which holds that a plaintiff who purchases or sells securities in an efficient market has presumptively relied on any material misstatement made about those securities. a. Applicant Shanda Games Limited is a video-games company. App. A, at 3. The remaining Applicants are former executives and directors at Shanda. Id. at 4-5. From 2009 to 2015, Shanda was a public company registered in the Cayman Islands with American Depository Shares (“ADS”) listed on NASDAQ. Id. at 3, 12. This case concerns a “going private transaction” undertaken by private investors in Shanda that “collectively controlled 90 percent of all shareholder votes” and thus held sufficient voting power to approve the merger. Id. at 7-8. But Shanda needed to give minority shareholders the opportunity to vote in favor of the proposed merger or to “dissent” and seek appraisal in the Cayman Islands. Jd. at 11. Shanda filed two proxy statements—in May and October 2015—in connection with the shareholder meeting at which the vote would take place. Id. At the shareholder meeting, the buyer group voted to approve the merger at a price of $7.10 per share. Jd. at 12-13. Respondent David Monk is a former holder of Shanda ADS. Monk did not dissent, so when the merger closed in November 2015 his shares were canceled, and the $7.10 per share merger price was deposited into his account. App. A, at 12-13. In 2018, Monk became the lead plaintiff in this securities-fraud putative class action. App. A, at 13. Monk does not allege that he read either proxy statement Shanda issued. See id. at 13-14. Nor does he claim that he knew about the proposed merger or made a conscious decision on how to react. Nonetheless, he claims fraud because he alleges that the proxy statements contained material misstatements that generally understated Shanda’s financial strength. Monk deduces that he was injured by fraud from the fact that shareholders who did exercise their appraisal rights were awarded $12.84 per ADS by the Cayman courts. Jd. at 13. Monk theorizes that although the Cayman court was answering a different question, its appraisal decision suggests that he was defrauded into obtaining only the $7.10-per-share merger price. b. The district court granted Shanda’s motion to dismiss the operative complaint, and a divided panel of the Second Circuit vacated in relevant part. App. A, at 15, 64. As relevant here, the majority explained that “[t]his case presents the question whether the fraud-on-the-market presumption is available to tenderers, such as Monk, who sold their shares in a freeze-out merger,” but did not purchase or sell shares on