In a landmark decision, the Supreme Court ruled unanimously on June 24 that foreign investors could no longer use U.S. courts to sue foreign companies for fraud, marking the first time the court has addressed the application of U.S. securities law overseas.
The case, Morrison v. National Australia Bank, involved three Australian investors who sued NAB for an alleged fraud involving the bank’s U.S. mortgage subsidiary in Florida. The court dismissed the case on the grounds that U.S. courts had no jurisdiction to hear cases involving foreign investors purchasing securities from a foreign company on a foreign exchange, otherwise known as “foreign-cubed” or “f-cubed” cases.
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