Monday, November 30, 2009
Cert. grant in Morrison v. National Australia Bank: Is there federal subject-matter jurisdiction over "foreign-cubed" securities class action?
Today the Supreme Court granted certiorari in Morrison v. National Australia Bank Ltd. (08-1191). The questions presented are:
1) Do anti-fraud provisions of U.S. securities laws extend to transnational frauds when (a) foreign-based parent company conducted substantial business in United States, its American Depository Receipts were traded on New York Stock Exchange, and its financial statements were filed with Securities and Exchange Commission, and (b) claims arose from massive accounting fraud perpetrated by American citizens at parent company's Florida-based subsidiary and were merely reported from overseas in parent company's financial statements?
(2) Should this court, which has never addressed issue of whether subject matter jurisdiction may extend to claims involving transnational securities fraud, set forth policy to resolve three-way conflict among circuits (i.e., District of Columbia Circuit versus Second, Fifth, and Seventh Circuits versus Third, Eighth, and Ninth Circuits)?
(3) Should Second Circuit have adopted SEC's proposed standard for determining proper exercise of subject matter jurisdiction in transnational securities fraud cases, as set forth in SEC's amicus brief submitted at request of Second Circuit, and should Second Circuit have adopted SEC's finding that subject matter jurisdiction exists here due to "material and substantial conduct in furtherance of" securities fraud that occurred in United States?
(Hat Tip: BNA’s Supreme Court Today)