Corporate Governance

Will The SEC Take Down Morrison?

By Tamar Weinrib

Pursuant to Section 929Y of the Dodd-Frank Act, the SEC solicited public comments back in October 2010 (and will conduct a study) to determine the extent to which private rights of action under the antifraud provisions of the federal securities laws should be extended extraterritorially. This directive provided the SEC with an opportunity to negate or meaningfully water down the Supreme Court's holding in Morrison v. National Australia Bank which essentially severed the foreign reach of Section 10(b) of the Securities and Exchange Act of 1934.  The submitted comments, now available on the SEC's website, come from parties in current litigation involving extraterritoriality issues, pension funds, the Australian, UK, and French governments, law professors, and the U.S. Chamber of Commerce, among others.  Unsurprisingly, many of the comments attack Morrison for eliminating an avenue of redress for innocent investors, even when the alleged securities fraud is U.S.-based.

Full post as published by PomTalk on March 09, 2011 (boomark / email).