Joseph De Simone, Esq. Partner, Mayer Brown LLP
Foreign-Cubed Securities Actions: What Are They? Why Are They Important? Are They Here To Stay?
The scope of U.S. securities law in global financial markets remains an open and increasingly important question, especially in the post-credit crisis global economy. One interesting line of cases in this arena are the so-called “foreign-cubed” cases in which a US securities class action is filed in a US court against a foreign issuer on behalf of foreign investors who purchased the securities on a foreign exchange. Because Congress has remained silent on such actions, and because there is no Supreme Court precedent regarding foreign-cubed litigation, federal courts have been fertile ground for decisions regarding the propriety of foreign-cubed cases. To date, there has been no consensus among US federal courts as to what specific test or factors to apply in determining whether they have subject matter jurisdiction over foreign cubed cases. This presentation will survey the current case law and explain how the courts are applying jurisdictional tests in foreign-cubed litigation. It also will address the legal precedents upon which the current cases rely and discuss the competing policy interests related to maintaining or declining such extraterritorial jurisdiction. Finally, the discussion will focus on potential future developments in the law of foreign-cubed cases, as well as strategies for a successful securities litigation practice in this area.
Joseph De Simone is Co-Head of the Firm's Securities Litigation and Corporate Governance Action Group