Supreme Court rules for Australian bank, limits use of US securities law in overseas dealingsBy AP
Thursday, June 24, 2010
High court sides with Aussie bank in fraud lawsuit
WASHINGTON — The Supreme Court has put new limits on foreign investors who want to use U.S. securities law and U.S. courts to sue foreign firms for fraud.
The court said Thursday that foreigners may not sue American or foreign firms for misconduct in connection with securities traded on foreign exchanges.
The case involved a challenge from Australian investors who want to sue the Melbourne-based National Australia Bank for securities fraud in U.S. federal court. The investors say they should have access to American courts because the claim of fraud relies on the actions of a bank-owned mortgage servicing company in Florida.
“This case involves no securities listed on a domestic exchange,” Justice Antonin Scalia said in his majority opinion. The court voted 8-0 against the investors. Justice Sonia Sotomayor took no part in the case.
The ruling could affect an ongoing lawsuit against the Paris-based Vivendi media group. In January, a jury decided in favor of U.S. and European shareholders who said Vivendi lied to the public about its shaky finances.
The plaintiffs in that case have put potential payout to investors at $9.3 billion, although a lawyer for Vivendi has said it’s impossible to estimate the money involved.
Tags: Australia, Australia And Oceania, Corporate Crime, Fraud And False Statements, Government Regulations, Industry Regulation, North America, United States, Washington