explaining “the focus of the Exchange Act is not upon the place where the deception originated, but upon purchases and sales of securities in the United States” and that “Section 10(b) does not punish deceptive conduct, but only deceptive conduct ‘in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered’ ”
How later courts described this case
- explaining “the focus of the Exchange Act is not upon the place where the deception originated, but upon purchases and sales of securities in the United States” and that “Section 10(b) does not punish deceptive conduct, but only deceptive conduct ‘in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered’ ”
- explaining that “ ‘unless there is the affirmative intention of the Congress clearly expressed’ to give a statute extraterritorial effect, ‘we must presume it is primarily concerned with domestic conditions[,]’” and finding that “there is no affirmative indication in the Exchange Act that § 10(b) applies ex-traterritorially”
- holding that to determine whether a complaint alleges a claim within a statute’s domestic ambit, courts should consider if the alleged conduct in or contact with the United States is within the statute’s “focus,” meaning “the object[ ]” of the statute’s “solicitude” or what the “statute seeks to regulate”
- holding that subject-matter jurisdiction “refers to a tribunal’s power to hear case,” not whether the “allegations the plaintiff makes entitle him to relief,” and that the extraterritoriality of a federal law is a merits, not a jurisdictional, issue (internal quotation marks omitted)
Written by the judges who cited it.
Distinguished
Distinguished by Securities & Exchange Commission v. Revelation Capital Management, Ltd., 246 F. Supp. 3d 947 (2017)
Defendants argue that pursuant to Morrison v. National Australia Bank Ltd., 561 U.S. 247, 130 S.Ct. 2869, 177 L.Ed.2d 535 (2010), the Court should hold that Rule 105 is inapplicable to Defendants’ trades.
Distinguished by Securities & Exchange Commission v. Straub, 921 F. Supp. 2d 244 (2013)
) However, Morrison is inapposite because the case addressed the permissible extraterritorial reach of § 10(b) of the Exchange Act and did not address personal jurisdiction at all.
Distinguished by Ahn v. C2 Educational Systems, Inc., 84 Va. Cir. 465 (2012)
In the opposition to the Motion for Summary Judgment, Plaintiff contends that Morrison is not controlling because the facts of this case are distinguishable from Morrison.
The opinion
Justice Breyer,
concurring in part and concurring in the judgment.
Section 10(b) of the Securities Exchange Act of 1934 applies to fraud “in connection with” two categories of transactions: (1) “the purchase or sale of any security registered on a national securities exchange” or (2) “the purchase or sale of . . . any security not so registered.” 15 U. S. C. §78j(b). In this case, the purchased securities are listed only on a few foreign exchanges, none of which has registered with the Securities and Exchange Commission as a “national securities exchange.” See § 78f. The first category therefore does not apply. Further, the relevant purchases of these unregistered securities took place entirely in Australia and involved only Australian investors. And in accordance with the presumption against extraterritoriality, I do not read the second category to include such transactions. Thus, while state law or other federal fraud statutes, see, e. g., 18 U. S. C. *274 §1341 (mail fraud), §1343 (wire fraud), may apply to the fraudulent activity alleged here to have occurred in the United States, I believe that § 10(b) does not. This case does not require us to consider other circumstances.
To the extent the Court’s opinion is consistent with these views, I join it.