The Securities Industry and Financial Markets Association (SIFMA) today welcomed the decision of the U.S. Court of Appeals for the Second Circuit in Morrison v. National Australia Bank, Ltd. In this case, a set of foreign plaintiffs sued a foreign issuer based on securities transactions in foreign countries for violations of U.S. securities laws. This so-called “foreign-cubed” case was the first of its kind to reach the Second Circuit. It required the Court to address the extent of the extra-territorial application of the U.S. securities laws. Ultimately, the Court concluded that “[W]e are an American court, not the world’s court, and we cannot and should not expend our resources resolving cases that do not affect Americans or involve fraud emanating from America.”
“The court got this one exactly right,“ said Ira Hammerman, SIFMA senior managing director and general counsel. “Foreign-cubed litigation crowds American courts, threatens American commerce and penalizes non-U.S. companies for having invested here. Non-U.S. companies should not be subjected to American-style class-action securities litigation tactics merely because they conduct operations in the U.S. Finally, legal precedent – which now includes this case – makes clear that U.S. courts should decline jurisdiction in these cases.”
In July 2007, SIFMA, together with the U.S. Chamber of Commerce, the U.S. Council for International Business, and the Association Française Des Enterprises Privées, filed an amicus brief in the case. In reaching its decision, the Court explicitly acknowledged several important policy arguments raised in SIFMA’s brief, including that foreign-cubed suits “undermine the competitiveness and effective operation of American securities markets, discourage cross-border economic activity, and cause duplicative litigation.”
SIFMA’s amicus brief is available at:
