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the extraterritorial application of §10(b), it was left to the court to 'discern' whether
Congress would have wanted the statute to apply. This disregard of the presumption against extraterritoriality ... has been repeated over many decades by various courts of appeals.... That has produced a collection of tests for divining what Congress would have wanted, complex in formulation and unpredictable in application.... The results ... demonstrate the wisdom of the presumption against extraterritoriality. Rather than guess anew in each case, we apply the presumption in all cases, preserving a stable background against which Congress can legislate with predictable effects."
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that the modelling done by HomeSide
Lending to determine future revenues from mortgage fees was based on overly optimistic assumptions. The plaintiffs claimed that this was part of an intentional scheme to defraud committed by HomeSide's management. By the time the case reached the US Supreme Court, only Australian investors remained as plaintiffs, although a US investor (Morrison, for whom the case was named) participated in earlier proceedings, but his case was thrown out for unrelated reasons.
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Stevens filed a partial concurrence, which
Ginsburg joined, rejecting the overturning of the existing jurisprudence on section 10(b); at the same time, he held that in this particular case, the defendants should prevail, since both the plaintiffs and defendants were Australian, and the case would be
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The Court clarified a "longstanding principle of
American law 'that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.'" It noted that "the Second Circuit believed that, because the Exchange Act is silent as to
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The decision was unanimous for the defendants, with two concurring opinions (and
Justice Sotomayor recusing herself, because she had been involved in the case at the Second Circuit). The majority opinion, by Scalia, held that since the plain language of section 10(b) only applies to US securities,
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case concerning the extraterritorial effect of U.S. securities legislation. Morrison extinguished two species of securities class-action claims that had proliferated in preceding years: "foreign-cubed" claims, in which foreign plaintiffs sued foreign issuers for losses on transactions on foreign
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extraterritorial jurisdiction, but this interpretation remains contested in the courts. In its section 929Y, the Act commissioned the SEC to study extending the permission to private actors. The study indicated a number of options for action to be taken by
Congress, which in varying degrees would
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of a mortgage servicing company, HomeSide
Lending, headquartered in Florida. In July 2001, NAB announced a USD 450 million write-down in assets due to losses associated with HomeSide Lending; and a further USD 1.75 billion write-down in September of that year. The root cause of the write-down was
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The plaintiffs argued that the fact the alleged fraud occurred in
Florida meant that it should be subject to US securities laws. The defendants argued that, since the alleged fraud related to trading in Australian securities, US securities laws did not apply.
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it should not be read to apply to non-US securities, despite longstanding precedent, originating in the 2nd
Circuit and subsequently adopted by other circuits as well, that §10(b) also applies to non-US securities.
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Section 10(b) of the
Securities Exchange Act of 1934 does not provide a cause of action to foreign plaintiffs suing foreign and American defendants for misconduct in connection with securities traded on foreign
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better dealt with by the Australian court system – but unlike the majority, he would apply 10(b) to cases involving non-US securities, where there was a closer connection to the US (e.g. US plaintiffs).
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asked for dismissal of an SEC suit against him based on the repercussions of the decision in this case, claiming his deals were outside the US and thus not subject to certain US laws.
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exchanges, and "foreign-squared" claims, brought by domestic plaintiffs against foreign issuers for losses on transactions on foreign exchanges.
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488:"Study on the Cross-Border Scope of the Private Right of Action Under Section 10(b) of the Securities Exchange Act of 1934"
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462:"Court Curtails Territorial Reach of Criminal Liability Under Section 10(b)"
291:, Pub. L. No. 111-203, sec. 292P(b)(2), § 27(b), 124 Stat. 1376, 1862 (2010)
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Robert Morrison, et al., Petitioners v. National Australia Bank Ltd., et al.
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Harvard Law School Forum on Corporate Governance and Financial Regulation
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118:, No. 03-cv-6537, 2006 WL 3844465 (S.D.N.Y. Oct. 25, 2006); affirmed
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Chad Bray (September 20, 2010), "Goldman Trader Seeks a Dismissal".
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Sotomayor took no part in the consideration or decision of the case.
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Staff of the U.S. Securities and Exchange Commission (April 2012).
433:"Morrison at Four: A Survey of Its Impact on Securities Litigation"
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Dodd–Frank Wall Street Reform and Consumer Protection Act
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Dodd–Frank Wall Street Reform and Consumer Protection Act
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Dodd–Frank Wall Street Reform and Consumer Protection Act
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United States Supreme Court cases of the Roberts Court
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of July 21, 2010, in its section 929P(b), allowed the
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Nathan Koppel and Ashby Jones (September 28, 2010). "
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96:5257; 78 U.S.L.W. 4700; Fed. Sec. L. Rep. (
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460:Jonathan R. Tuttle (September 11, 2013).
259:Stevens (in judgment), joined by Ginsburg
520:Jonathan Stempel (September 30, 2010). "
505:Securities Ruling Limits Claims of Fraud
315:The case concerned the 1998 purchase by
612:Supreme Court (slip opinion) (archived)
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275:Securities Exchange Act of 1934 §10(b)
116:In re Nat'l Australia Bank Sec. Litig.
123:Morrison v. Nat'l Australia Bank Ltd.
18:2010 United States Supreme Court case
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570:Morrison v. National Australia Bank
447:Morrison v. National Australia Bank
299:Morrison v. National Australia Bank
24:Morrison v. National Australia Bank
36:Supreme Court of the United States
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645:United States securities case law
635:United States Supreme Court cases
580:247 (2010) is available from:
365:In late 2010, Fabrice Tourre of
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660:Extraterritorial jurisdiction
394:Extraterritorial jurisdiction
302:, 561 U.S. 247 (2010), was a
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304:United States Supreme Court
114:Motion to dismiss granted,
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655:National Australia Bank
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417:. JURIST - Paper Chase.
362:mitigate the decision.
317:National Australia Bank
88:130 S. Ct. 2869; 177
45:Decided June 24, 2010
43:Argued March 29, 2010
429:George T. Conway III
328:Opinion of the Court
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629:Categories
449:syllabus 2
400:References
311:Background
159:exchanges.
94:U.S. LEXIS
92:535; 2010
60:Docket no.
471:March 20,
345:Aftermath
140:granted,
90:L. Ed. 2d
70:Citations
568:Text of
526:Archived
373:See also
240:Majority
120:sub nom.
585:Cornell
534:Reuters
153:Holding
136:2008);
134:2d Cir.
64:08-1191
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111:Prior
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357:and
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146:U.S.
127:F.3d
83:more
75:U.S.
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355:SEC
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