Sunday, December 18, 2011
Comity and Cooperation: Securities Regulation in a Global Marketplace, by Kellye Y. Testy, University of Washington - School of Law, was recently posted on SSRN. Here is the abstract:
When the securities laws were enacted, and even later when Rule 10b-5 was promulgated, transactions in securities were primarily domestic in nature. A dramatic globalization trend, however, is presently transforming the nature of securities markets and the nature of transactions conducted in those markets. Courts will soon be faced with more frequent and more difficult decisions as to the scope of the antifraud protections of the U.S. securities laws.
This article suggests that the time is ripe for the SEC or Congress to consider taking action to limit the extraterritorial application of the United States securities laws in antifraud cases. Furthermore, the SEC should look to its work in Regulation S and be guided by policies that further integrate world markets and prevent U.S. markets from being placed at a competitive disadvantage due to the stringency and over-zealous application of U.S. laws.