No one should pack their bags for Shangri-La quite yet. The defendants in the UBS case have received a huge boost from another S.D.N.Y. court regarding the scope of the National Australia Bank (NAB) decision.
At issue is whether a foreign issuer listed on both a foreign exchange and a U.S. exchange can be subject to suit in the U.S. by investors who purchased their shares on the foreign exchange. In In re Alstom SA Sec. Litig., 03 Civ. 6595 (VM) (S.D.N.Y. Sept. 14, 2010), the court found that NAB's use of the phrase "listed on domestic exchanges" did not, based on the existence of a dual listing (U.S. and France), create a U.S. cause of action for investors who purchased their Alstom shares on the French exchange.
The court also declined to exercise supplemental jurisdiction over the claims of the foreign purchasers and apply French law to adjudicate them. Among other things, the court noted that "Plaintiffs have not given any indication that the French claims were unavailable when they began this action and the Court is not now persuaded they should be allowed to press the reset button here, particularly where, by Plaintiffs' own reckoning, France's ten-year statute of limitations allows the claims to be brought in France."
Holding: Claims of plaintiffs who purchased securities on foreign exchanges dismissed.
Quote of note: "That the transactions themselves must occur on a domestic exchange to trigger application of Sec. 10(b) reflects the most natural and elementary reading of [the NAB decision]."Posted by Lyle Roberts at September 17, 2010 5:44 PM | TrackBack