| dc.description.abstract |
In recent years securities markets have become increasingly interconnected,
and securities fraud frequently crosses borders. The United States' welldeveloped
private enforcement mechanism for securities fraud is very
attractive to investors around the world who are harmed by transnational
securities fraud. However, the Supreme Court's recent decision in Morrison
v. National Australia Bank, in overturning nearly fifty years offederal court
jurisprudence, severely limits the ability of investors to rely on the U.S.
securities laws to protect them when the relevant fraud has a significant
overseas component. Replacing the Second Circuit 's long-standing conduct
and effects tests for determining the extraterritorial reach of the securities
laws, the Supreme Court articulated a new transactional test for when the
laws apply. This Article analyzes the Supreme Court's opinion and its
implications for the regulation of transnational securities fraud It also
examines certain provisions of the Dodd-Frank Act which attempted to
overturn the Supreme Court's decision as it applies to securities fraud
enforcement actions brought by the Securities and Exchange Commission.
Ultimately, this Article argues that the Morrison decision significantly
curtails the extraterritorial application of the securities laws, which may
harm investor confidence, at least in the short term. However, it also has
the potential to encourage greater international cooperation in regulating
transnational securities fraud, as well as catalyzing regulatory reform in
other countries. |
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