|  | | 2012 News and Press Releases | | |
HEADLINE NEWS:
Thinking About Morrison's Unintended Problems
Kevin LaCroix
The D & O Diary. June 4, 2012
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EXCERPT: The U.S. Supreme Court’s blockbuster opinion in Morrison v National Australia Bank has had an enormous impact, resulting as it has in the dismissal of numerous securities suits involving non-U.S. companies that previously would have been permitted to go foward in U.S. courts. But over time it has become clear that the Supreme Court's opinion does not answer every question, which in turn has meant challenges for the lower courts in certain circumstances. In an interesting June 1, 2012 post on the Dealbook blog entitled “Securities Law Ruling Creates Unintended Problems” […], Ohio State University law professor Steven Davidoff examines problems that have arisen following Morrison in two specific contexts – domestic ADR transactions and derivatives transactions. Davidoff’s column points out that a couple of appeals now pending in the Second Circuit could have an enormous impact on the reach of U.S. securities to these kinds of transactions. […] Of course, none of us can know for sure what the Second Circuit may do in the pending appeal in the Société Générale case or in the pending appeal in the Porsche case. But I think it is fair to point out that the lower courts have generally held that the U.S. securities laws apply when the place of the transaction is in the U.S, regardless of the identity of the security or the nationality of the parties involved. If, as Morrison requires, the focus of the inquiry is on the place of the transaction, then the U.S. securities laws should apply to domestic ADR transactions, regardless whether issuers’ common shares are listed elsewhere – just as the U.S. securities laws should apply to derivative transactions that take place in the U.S, regardless whether the referenced security trades elsewhere. |
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