The scope of the National Australia Bank (NAB) decision on the extraterritorial application of Section 10(b) continues to be tested in the lower courts. A case to keep an eye on is In re UBS AG Sec. Litig. (S.D.N.Y.), where the issue is what the Supreme Court meant when it stated that Section 10(b) applies to "the purchase of a security listed on an American stock exchange, and the purchase or sale of any other security in the United States." To wit, does it mean that if a foreign issuer is listed on both a foreign exchange and a U.S. exchange it can be subject to suit in the U.S. by investors who purchased their shares on the foreign exchange?
The AmLaw Litigation Daily has a post (subscrip. req'd) on the case, which includes a link to UBS's recent motion to dismiss. Not surprisingly, UBS argues that reading "listed" to authorize U.S. securities class actions based on the purchases of securities on a foreign exchange would "fly in the face" of the Supreme Court's conclusion that Section 10(b) does not regulate foreign exchanges. Stay tuned.
Quote of note (UBS brief): "Over 850 foreign issuers, including NAB and UBS, list and register their shares on both a foreign exchange and a U.S. exchange. It defies logic to believe that Justice Scalia, without explanation and contrary to the rest of his majority opinion, included the word 'listed' to expand Section 10(b) in a way that will discourage foreign issuers from listing their shares on U.S. exchanges and make the United States the 'Shangri-La' for worldwide securities class actions."Posted by Lyle Roberts at September 10, 2010 9:40 PM | TrackBack