A case that began as an SEC enforcement action against an Internet advertising company has now reached the Supreme Court’s calendar for a potential re-examination of its landmark decision in Morrison v. National Australia Bank, 561 U.S. 247 (2010). Specifically, at its upcoming November 1 conference, the Supreme Court is scheduled to consider a certiorari petition questioning the impact of §929P(b) of the Dodd-Frank Act on the extraterritorial reach of SEC and criminal securities fraud actions. Scoville v. Securities and Exchange Commission, No. 18-1566.
‘Morrison’ and Dodd-Frank
As is now well known, in Morrison, the Supreme Court held that §10(b) of the Exchange Act does not apply extraterritorially, but only to “transactions in securities listed on domestic exchanges” or “domestic transactions in other securities.” 561 U.S. at 265, 267. In addition to setting forth this transactional standard, Morrison emphasized that the reach of §10(b) is a merits question (what conduct is prohibited) and not a subject matter jurisdiction one (does the court have power to hear the case). 561 U.S. at 254.
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