Morrison v National Australia Bank and its Progeny: US Capital Markets Become Safer and More Hospitable for Non-US Corporates

Morrison v National Australia Bank, 130 S. Ct. 2869 (2010), a US Supreme Court decision from June 2010, and more recent rulings interpreting and applying this decision in a variety of contexts, have limited dramatically the potential liability of non-US companies and their officers and directors pursuant to the basic anti-fraud provisions under the Securities Exchange Act of 1934 (the Exchange Act), Section 10(b) and Rule 10b-5 (the US anti-fraud provisions). This case law clearly suggests that the US capital markets are becoming safer and more hospitable to non-US corporates.

In response to the Supreme Court’s decision in Morrison, the US Congress reacted quickly to reaffirm extraterritorial application of the US anti-fraud provisions in the context of enforcement and directed the US Securities and Exchange Commission (the SEC) to solicit public comment and publish a study to determine the extent to which private rights of action under the US anti-fraud provisions should be extended extraterritorially.