Monday, October 6, 2008
The SEC filed an amicus brief, at the request of the Second Circuit, in Morrison v. National Australia Bank, Ltd. (No. 07-0583-cv) to offer its views as to whether the antifraud provisions of the U.S. securities laws apply to the alleged transnational fraud involving foreign purchasers who bought a foreign issuer’s securities on a foreign exchange, but where significant aspects of the fraudulent conduct occurred in the United States. The SEC urged the court to expressly set forth the following standard to assess whether the antifraud provisions apply to transnational securities-fraud cases:
The antifraud provisions of the securities laws apply to transnational frauds that result exclusively or principally in overseas losses if the conduct in the United States is material to the fraud’s success and forms a substantial component of the fraudulent scheme.