On June 24, 2010, the Supreme Court announced its decision in Morrison v. National Australia Bank. The question in this case was whether §10(b) of the Securities and Exchange Act of 1934 and SEC Rule 10b-5, both of which are anti-fraud provisions, applied to allegations that fraudulent activity in the United States affected the sale price of an Australian bank's stock in Australia.
In an opinion delivered by Justice Scalia, the Court held that §10(b) and Rule 10b-5 did not give rise to a cause of action for this conduct. The Court reasoned that §10(b) and Rule 10b-5 did not apply extraterritorially in light of the longstanding presumption that legislation, absent clear contrary indication, will be held to apply only within the territorial jurisdiction of the United States, and that the conduct alleged to have taken place in the United States was not sufficient to trigger application of the statute given its focus on the purchase and sale of securities in the United States.
To discuss the case, we have Hofstra University School of Law Associate Professor Ronald J. Colombo. Professor Colombo joined a brief in support of the respondent.