An American lawyer, seated in his midtown Manhattan office, receives a call from a prospective client located halfway around the world, in Sydney, Australia. The client purchased shares of an Australian corporation on the Australian stock exchange — and lost a lot of money. He claims the offering materials were false and misleading, and wants to bring suit. But instead of bringing suit in Sydney, for strategic reasons he wants to commence an action in New York, under U.S. law.
The client has a proposed justification for filing suit in New York. The Australian corporation had a wholly owned subsidiary located in the United States. That subsidiary engaged in improper accounting practices that led to grossly overstated revenues for the subsidiary’s business. Once those overstated revenues were incorporated into the Australian corporation’s financial reports, those reports were also materially misleading. Is that, the client asks, enough to get me into American court?
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