In a new amicus brief, the former S.E.C. chairman Jay Clayton and the former commissioner Joseph Grundfest say that the plaintiff’s argument threatens to vastly expand legal risk for businesses.

Those with registered shares are afforded extra protections, and have an easier path to sue. That registered versus unregistered distinction matters, Mr. Grundfest said. Otherwise, companies could face a far larger pool of litigants seeking damages, he said, which is not what Congress intended for securities law. “It’s important in our constitutional structure that each branch of government respects its role and stays in its lane,” he told DealBook.