Adventures on the Barbary Coast: Morrison and Enforcement in a Globalised Securities Market
38 Pages Posted: 15 Nov 2011 Last revised: 22 Nov 2011
Date Written: November 15, 2011
Although efforts have been made to develop international or harmonised regimes for the enforcement of securities law, the global architecture of securities regulation is underdeveloped. In particular, the harmonisation project may be sidelined by nations enforcing their securities laws extraterritorially. Notwithstanding issues of comity, the extraterritorial operation of the anti-fraud provisions in United States securities law has been expansively interpreted by US courts, particularly in multinational securities class actions, and the US has accordingly been portrayed as a securities policeman or, more disparagingly, a legal imperialist. This ended abruptly with the US Supreme Court decision in Morrison v National Australia Bank Ltd, where it was held that the anti-fraud provisions did not apply in an action brought by an Australian investor against an Australian company listed on an Australian exchange. This case note will examine the context and consequences of Morrison, including the legislation passed by Congress in its wake, the tensions caused if US citizens lose the ‘protective shield’ of US law and the centrifugal effect of the decision that may lead to more securities class actions being commenced in Australia.
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