Steven I. WEISSMAN, as Custodian under the Florida Uniform Transfers to Minors Act, as Trustee and individually, Plaintiff-Appellee, v. NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC., a Delaware not-for-profit corporation, NASDAQ Stock Market, Inc., a Delaware corporation organized for profit, Defendants-Appellants, 500 F.3d 1293

BARKETT, Circuit Judge: The National Association of Securities Dealers, Inc. and its subsidiary, the NASDAQ Stock Market, Inc. (collectively “NASDAQ”), appeal the denial of their Rule 12(b)(6) motion to dismiss Steven Weissman’s complaint. Weissman sought to recover losses suffered following the purchase of WorldCom, Inc. (“WorldCom”) stock, which Weissman allegedly purchased in reliance on NASDAQ’s misrepresentations in advertisements touting the stock.

NASDAQ moved to dismiss, asserting absolute immunity from suit on the grounds that the conduct alleged in the complaint was undertaken pursuant to its quasi-governmental role as a market regulator under the Securities Exchange Act (SEA), 15 U.S.C. § 78a et seq. The district court rejected this contention, explaining that while NASDAQ does enjoy absolute immunity for statutorily-delegated regulatory or disciplinary functions, it is not entitled to immunity in this case because Weissman’s complaint relates to private commercial conduct not delegated by the Act. We affirm the decision of the district court.

BACKGROUND Between December 2000 and June 2002, Weissman purchased 82,800 shares of WorldCom stock on behalf of his minor children. In the wake of WorldCom’s collapse, and after losing almost the entire investment, Weissman filed a diversity suit in federal district court against NASDAQ.

In his complaint, Weissman disavowed any reliance on NASDAQ’s regulatory activity as the basis for his suit, emphasizing that “[t]his action is based solely on the for-profit commercial business activity of the Defendants [,...] including] Defendants’ approximately $100 million ... marketing and advertising campaign during the years 2000, 2001 and 2002 to promote and sell ... shares of WorldCom, Inc.” Weissman claimed that NASDAQ violated Fla. Stat. § 517.301(l)(

b) by promoting WorldCom through its marketing and advertising without disclosing that its revenues were directly enhanced by increased trading in WorldCom stock; offered WorldCom shares for sale without registering as a broker, in violation of Fla. Stat. § 517.12; and committed common law fraud and/or negligent misrepresentation in its attempts to induce investors to purchase shares of WorldCom.

In addition to its claim of absolute immunity, NASDAQ alternatively moved to dismiss the complaint on the grounds that Weissman lacked a federal private right of action, failed to exhaust his administrative remedies, and failed to state a cause of action under Florida law. The district court denied the motion in all respects. NASDAQ timely appealed. Weissman moved to dismiss the appeal for lack of jurisdiction. We granted that motion in part, dismissing NASDAQ’s assertions that Weissman failed to adequately plead his state law claims and did not exhaust his administrative remedies. Weissman v. Nat’l Ass’n of Sec.

Dealers, Inc., No. 04-13575 (11th Cir. Oct. 13, 2004). However, we permitted the appeal to proceed as to the district court’s denial of NASDAQ’s motion to dismiss premised on absolute immunity, as well as its claim that Weiss-man lacked a federal private right of action. Id.

After oral argument, a panel of this court reversed the district court’s denial of absolute immunity with regard to those portions of Weissman’s complaint that involve NASDAQ’s “dissemination of WorldCom’s fraudulent financial statements,” but affirmed the denial of absolute immunity with regard to the remainder of Weissman’s complaint, specifically, allegations of misrepresentation relating to NASDAQ’s promotion of WorldCom stock. Weissman v. Nat’l Ass’n of Sec. Dealers, Inc., 468 F.3d 1306 (11th Cir.2006), (vacated and reh’g en banc granted, Weissman v. Nat’l Ass’n of Sec.

Dealers, Inc., 481 F.3d 1295 (11th Cir.2007)). We later vacated the panel opinion and granted rehearing en banc to address the question of whether a self-regulatory organization (“SRO”), such as NASDAQ, enjoys absolute immunity for the advertisements described in the complaint in this case. See Weissman v. Nat’l Ass’n of Sec. Dealers, Inc., 481 F.3d 1295 (11th Cir.2007) (vacating panel opinion and granting rehearing en banc). We now consider that question en banc and affirm the district court’s determination that NASDAQ does not enjoy immunity for the conduct alleged.

STANDARD OF REVIEW We review de novo the district court’s denial of a motion to dismiss on the basis of immunity, construing all inferences to be drawn therefrom in the light most favorable to the plaintiff and accepting all well-pleaded factual allegations as true. See Maggio v. Sipple, 211 F.3d 1346, 1350 (11th Cir.2000); see also Buckley v. Fitzsimmons, 509 U.S. 259, 261, 113 S.Ct. 2606, 125 L.Ed.2d 209 (1993) (assuming allegations in complaint to be “entirely true” for purposes of determining absolute immunity). Moreover, a party claiming immunity from suit bears the burden of proof. Butz v.

Economou, 438 U.S. 478, 506, 98 S.Ct. 2894, 57 L.Ed.2d 895 (1978). DISCUSSION Under the Securities Exchange Act of 1934, Congress established a system of regulation over the securities industry, which relies on private, self-regulatory organizations to conduct the day-to-day regulation and administration of the United States’ stock markets, under the close supervision of the United States Securities and Exchange Commission (“SEC”). The SEC authorized NASD to delegate its SRO functions to NASDAQ for operating and maintaining the NASDAQ stock market.

See SEC Release No. 34-39326, Order Approving the Plan of Allocation and Delegation of Functions by NASD to Subsidiaries, 62 Fed.Reg. 62,385 (Nov. 21, 1997). Thus, NASDAQ serves as an SRO within the meaning of the Securities Exchange Act, 15 U.S.C. § 78c(a)(26), which vests it with a variety of adjudicatory, regulatory, and prosecutorial functions, including implementing and effectuating compliance with securities laws; promulgating and enforcing rules governing the conduct of its members; and listing and de-listing stock offerings.

See 15 U.S.C. §§ 78c(a)(26), 78f(b), 78s(g); 15 U.S.C. § 78f(d); 59 Fed.Reg. 29834, 29843 (1994). At the same time, as a private corporation, NASDAQ may engage in a variety of nongovernmental activities that serve its private business interests, such as its efforts to increase trading volume and company profit, as well as its daily administration and management of other business affairs. Indeed, even though the SEC has explicitly delegated regulatory functions to SROs, the SEC itself is mindful that SROs have dual status as both quasi-regulators and private businesses.

Because they perform a variety of vital governmental functions, but lack the sovereign immunity that governmental agencies enjoy, SROs are protected by absolute immunity when they perform their statutorily delegated adjudicatory, regulatory, and prosecutorial functions. See Barbara v. New York Stock Exch., 99 F.3d 49, 59 (2d Cir.1996); Austin Mun. Sec., Inc. v. Nat’l Ass’n of Sec. Dealers, Inc., 757 F.2d 676, 692 (5th Cir.1985); Sparta Surgical Corp. v. Nat’l Ass’n of Sec. Dealers, Inc., 159 F.3d 1209, 1215 (9th Cir.1998); Zandford v. Nat’l Ass’n of Sec. Dealers, Inc., 80 F.3d 559, 559 (D.C.Cir.1996).

However, entities that enjoy absolute immunity when performing governmental functions cannot claim that immunity when they perform non-governmental functions. For example, municipal corporations may enjoy the same level of immunity as the government itself when “acting in their governmental capacity ....

When, however, they are not acting in the exercise of their purely governmental functions, but are performing duties that pertain to the exercise of those private franchises, powers, and privileges which belong to them for their own corporate benefit, ... then a different rule of liability is applied and they are generally held responsible for injuries arising from their negligent acts or their omissions to the same extent as a private corporation under like circumstances.” Owen v. City of Inde pendence, 445 U.S. 622, 645 n. 27, 100 S.Ct. 1398, 63 L.Ed.2d 673 (quoting W.

Williams, Liability of Municipal Corporations for Tort § 4, at 9 (1901)). The dual nature of SROs as private companies that carry out governmental functions is similar to that of municipal corporations. Thus, “[t]o be sure, self-regulatory organizations do not enjoy complete immunity from suits.” Sparta, 159 F.3d at 1214. Only when an SRO is “acting under the aegis of the Exchange Act’s delegated authority” does it enjoy that privilege. Id. Absolute immunity is not appropriate unless the relevant conduct constitutes a delegated quasi-governmental prosecutorial, regulatory, or disciplinary function.

See D’Alessio v.

New York Stock Exch., Inc., 258 F.3d 93, 105 (2d Cir.2001) (“a[n] SRO, such as the [New York Stock Exchange], may be entitled to immunity from suit for conduct falling within the scope of the SRO’s regulator and general oversight functions”) (emphasis added); see also Austin, 757 F.2d at 692 (“NASD is entitled to absolute immunity for its role in disciplining its members and associates.”); Barbara, 99 F.3d at 59 (absolute immunity granted in suit arising from disciplinary action against employee of exchange member); Sparta, 159 F.3d at 1215 (holding that decision to suspend trading was “a regulatory function cloaked in immunity”).

Furthermore, because the law favors providing legal remedy to injured parties, grants of immunity must be narrowly construed; that is, courts must be “careful not to extend the scope of the protection further than its purposes require.” Forrester v. White, 484 U.S. 219, 224, 108 S.Ct. 538, 98 L.Ed.2d 555 (1988); see also Owen, 445 U.S. at 645 n. 28, 100 S.Ct. 1398 (1980) (citations omitted).

Thus, because immunity is appropriate only when an SRO is performing regulatory, adjudicatory, or prosecutorial functions that would otherwise be performed by a government agency, it follows that absolute immunity must be coterminous with an SRO’s performance of a governmental function. When an SRO is not performing a purely regulatory, adjudicatory, or pros-ecutorial function, but rather acting in its own interest as a private entity, absolute immunity from suit ceases to obtain.

To determine whether an SRO’s conduct is quasi-governmental, we look to the objective nature and function of the activity for which the SRO seeks to claim immunity. The test is not an SRO’s subjective intent or motivation, Bogan v. Scott-Harris, 523 U.S. 44, 54, 118 S.Ct. 966, 140 L.Ed.2d 79 (1998) (noting that the question of whether absolute immunity for a legislative act applies “turns on the nature of the act, rather than on the motive or intent” of the party performing the act), although there may be some correlation between motive and intent and the function being performed.

NASDAQ suggests that, because it serves important regulatory functions, we should adopt a rule that would find an SRO absolutely immune for all activity that is “consistent with” its powers and functions under the Exchange Act and SEC regulations. Under NASDAQ’s view, even advertisements that promote the sale of a particular stock and serve no regulatory function whatsoever would be shielded by absolute immunity, because advertisements are “consistent with” NASDAQ’s role as an SRO.

In urging this broad test, NASDAQ argues that it is the standard followed by the Second Circuit in DAles-sio and that we should follow its holding. We find this argument unavailing. First, DAlessio does not address the kind of conduct at issue in this case. The court in DAlessio granted absolute immunity to an SRO where the complaint in that case dealt with allegations of “improper performance of its interpretive, enforcement and referral functions” in connection with the suspension of a broker — a core regulatory responsibility delegated to SROs by the SEC. D’Alessio, 258 F.3d at 105-106.

Second, NASDAQ imperfectly represents the language of D’Alessio in order to arrive at the “consistent with” test it urges. While it is true that D’Alessio held that an SRO “is entitled to immunity from suit when it engages in conduct consistent with the quasi-governmental powers delegated to it ...,” it made clear that this is true only when an SRO is “acting in its capacity as a[n] SRO.” D’Alessio, 258 F.3d at 106 (emphasis added).

Thus, contrary to NASDAQ’s assertions, D’Alessio did not apply this test “whenever SROs engage in conduct that is simply “consistent with” their powers. (NASDAQ’s Reply Brief p. 16) (emphasis added). Indeed, every case that has found an SRO absolutely immune from suit has done so for activities involving an SRO’s performance of regulatory, adjudicatory, or prosecutorial duties in the stead of the SEC. See Sparta Surgical Corp. v. Nat’l Ass’n of Sec. Dealers, Inc., 159 F.3d 1209, 1213-15 (9th Cir.1998) (decision to suspend trading and delist shares of a company); D’Alessio v.

New York Stock Exch., Inc., 258 F.3d 93, 104-06 (2d Cir.2001) (disciplinary decision banning trader from the NYSE floor); Barbara v. New York Stock Exch., Inc., 99 F.3d 49, 58-59 (2d Cir.1996) (conduct in carrying out disciplinary decision); DL Capital Group, LLC v. Nasdaq Stock Mkt., Inc., 409 F.3d 93, 97-100 (2d Cir.2005) (decision to suspend trading of a security, to cancel certain trades, and to announce these actions); Dexter v. Depository Trust & Clearing Corp., 406 F.Supp.2d 260, 263-64 (S.D.N.Y.2005), aff'd, 219 Fed.Appx. 91 (2d Cir.2007) (decision setting an ex-dividend date).

Therefore, we find D’Alessio inapplicable and hereby reject a standard that would grant SROs absolute immunity for all activity that is merely “consistent with” their delegated powers. Thus, we now turn to Weissman’s complaint to examine the nature and function of NASDAQ’s actions as alleged therein. The complaint alleges the following conduct: NASDAQ touted, marketed, advertised and promoted WorldCom, falsely representing it as a good company and worthwhile investment and disseminating its fraudulent financial statements, without revealing that, inter alia: (

i) Defendants were engaged in a partnership with WorldCom to promote the sale of its securities in order to generate trading volume and income for the Defendants; (ii) Defendants did not review the fraudulent WorldCom financial statements which they disseminated, thus assisting in the perpetration of the largest corporate fraud in the U.S. history; (iii) Defendants directly and indirectly profited from the sale of WorldCom Shares to Plaintiff; [and] (iv) WorldCom was not in compliance with N[ASDAQ] listing requirements .... (Complaint ¶ 12) In purchasing shares of WorldCom, Plaintiff relied on NASDAQ’s advertising, which repetitively advertised World-Com as a “successful growth company”.

For example, appearing in major prime time programming such as West Wing and MSNBC News with Brian Williams, NASDAQ ran TV spots for its 100 Index Trust, better known as the QQQ .... The ads feature a group of companies included in the trust, specifically including and showing WorldCom.

The key message is that the world’s most successful, sought after companies, can be found on the N[ASDAQ] stock market. (Complaint ¶ 61) Seeking to calm the markets in the wake of Enron fraud, on April 11, 2002, NASDAQ took out a two full page spread advertisement in the Wall Street Journal discussing its belief in the need for N[ASDAQ] listed companies to provide accurate financial reporting in accordance with Generally Accepted Accounted Principals (“GAAP”), “supported by a Knowledgeable Audit Committee”. On one page is a picture of the N[ASDAQ] ticker with the slogan “The Responsibilities We All Share”.

On the opposite page under the headline “Keeping Our Markets True — It Is All About Character” is a list of the chief executives of the “good” N[ASDAQ] listed companies under the sub-heading “Our Beliefs Stand In Good Company”. Listed thereunder as an endorser of these N[ASDAQ] goals is “Bernard J. Ebbers, President and Chief Executive Officer WorldCom, Inc.” The message implicitly conveyed by the ad is that WorldCom and its CEO are endorsed by NASDAQ as, inter alia, having good character, accounting done in accordance with GAAP, and a viable audit committee in accordance with N[ASDAQ] listing requirements.

Plaintiff relied on this endorsement the following day in purchasing yet additional shares of WorldCom as its price continued on a downward spiral. (Complaint ¶ 62; see also Complaint ¶ 96). As noted earlier, in deciding whether NASDAQ is entitled to absolute immunity, we look to the nature and function of NASDAQ’s actions as alleged in the complaint. We can find no quasi-governmental function served by the advertisements here.

The allegations do not relate to NASDAQ’s statutorily delegated responsibility to “prevent fraudulent and manipulative ... practices,” “promote just and equitable principles of trade,” “remove impediments to and perfect” the free market, or “protect investors and .the public interest.” 15 U.S.C. § 78o-3(b)(6). The particular advertisements alleged by the complaint were in no sense coterminous with the regulatory activity contemplated by the Exchange Act. This conduct was private business activity, and “[w]hen conducting private business, [SROs] remain subject to liability.” Sparta, 159 F.3d at 1214.

NASDAQ represents no one but itself when it entices investors to trade on its exchange and, specifically, when it suggests that particular companies are sound investments. As a private corporation, NASDAQ places some advertisements that by their very nature serve the function of promoting certain stocks that appear on its exchange in order to increase trading volume and, as a result, company profits.

Even if NASDAQ’s status as a money-making entity does not foreclose absolute immunity for any number of its activities, its television and newspaper advertisements cannot always be said to directly further its regulatory duties under the Securities Exchange Act. These advertisements — by their tone and content — were in the service of NASDAQ’s own business, not the government’s, and such distinctly non-governmental conduct is not protected by absolute immunity.

Because we conclude that NASDAQ’s advertising activity alleged in this case does not serve an adjudicatory, regulatory, or prosecutorial function, the district court’s denial of absolute immunity to NASDAQ for the advertisements described in this case is AFFIRMED. . Specifically, the district court held that both the absence of a federal private right of action, as well as any failure to exhaust SEC remedies, were immaterial because all of Weissman's claims were based solely on state law.

It further held that, because NASDAQ’s enjoyment of absolute immunity for quasi-governmental activity does not insulate it from suit for activity related to private business, its alleged advertisement and promotion of WorldCom was outside the scope of such immunity. .

Thus, any contention that Weissman’s complaint fails to state a cause of action is not before us. .Because the en banc panel considered only this narrow issue, we hereby reinstate the original panel's determinations denying Weissman’s motion for attorneys’ fees and double costs; reversing the trial court's denial of absolute immunity for the portions of Weissman's complaint involving NASDAQ's "dissemination of WorldCom’s fraudulent financial statements”; and finding no error in the trial court’s conclusion that the absence of a federal private right of action was immaterial in this case. See Weissman v.

Nat’l Ass’n of Sec. Dealers, Inc., 468 F.3d 1306 (11th Cir.2006) (vacated and reh’g en banc granted, Weissman v. Nat’l Ass'n of Sec. Dealers, Inc., 481 F.3d 1295 (11th Cir.2007)). . The SEC has stated explicitly that "[a]s competition among markets grows, the markets that SROs operate will continue to come under increased pressure to attract order flow. This business pressure can create a strong conflict between the SRO regulatory and market operations functions.' SEC Release No. 34-50700, Concept Release Concerning Self-Regulation, 69 Fed.Reg. 71,256, 71,-261-262 (Dec. 8, 2004). .

The complaint frequently refers to NASDAQ as the “The For Profit.” For the sake of clarity and consistency, when citing the complaint, this opinion will in each instance render "The For Profit” as NASDAQ.