October 1, 2010

A Step Too Far

While defendants have had the better of the post-NAB decisions to date, a court in the S.D.N.Y. may have gone a step too far this week. In In re Societe Generale Sec. Litig., 08 Civ. 2495 (S.D.N.Y. Sept. 29, 2010), the court found that NAB's prohibition on claims based on the purchase of securities on foreign exchanges also extends to claims based on the purchase of American Depository Receipts in the U.S. Because Societe Generale's ADRs "were not traded on an official American securities exchange," the court held that trading in them was a "predominately foreign securities transaction" and Section 10(b) was inapplicable. The D&O Diary has a lengthy post on the decision and expresses some skepticism about the court's reasoning.

Posted by Lyle Roberts at October 1, 2010 8:54 PM | TrackBack
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