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The Securities Industry and Financial Markets Association (SIFMA) today filed an amicus brief in the U.S. Supreme Court in the case of Morrison v. National Australia Bank. SIFMA’s brief was joined by a preeminent group of business organizations including: the Association for Financial Markets in Europe, the U.S. Chamber of Commerce, the U.S. Council for International Business, the Association Française des Entreprises Privées, and the GC100.
The case involves a group of foreign plaintiffs who sued a foreign issuer based on securities transactions in foreign countries for violations of U.S. securities laws. This so-called “foreign-cubed” case requires the Court to address the extent of the extraterritorial application of the U.S. securities laws.
SIFMA’s brief suggests that the Court should decline subject matter jurisdiction in foreign-cubed cases. Such cases undermine the competitiveness of American securities markets, making them less attractive for foreign investment and capital raising, and cause duplicative litigation. SIFMA voiced these same concerns in July 2007 when it filed its initial amicus brief before the U.S. Court of Appeals for the Second Circuit.
SIFMA’s most recent brief urges the Court to adopt a bright line rule that precludes private securities fraud claims against foreign issuers arising out of securities transactions executed on foreign exchanges or in foreign markets. Such a rule is necessary to ensure the fairness and predictability that is essential to encourage foreign investment in the U.S. and preserve the preeminence of our capital markets.
As Ira Hammerman, SIFMA’s general counsel, explained, “Our proposed bright line rule approach would ensure that investors who buy securities of foreign companies in foreign markets bring their securities claims exactly where they should expect to – in foreign courts, under foreign law.”
SIFMA’s U.S. Supreme Court amicus brief is available at: http://www.sifma.org/regulatory/amicus_briefs.html
