The sweeping impact of the Supreme Court’s decision in Morrison v. National Australia Bank Ltd.1 on the scope of both the federal securities laws and other statutes has yet to be fully mapped, but this column will attempt a preliminary reconnaissance. As the first decisions in its wake have shown,2 Morrison affects much more than the “f-cubed” class action, and will by its terms bar even private actions by American investors who purchase the securities of American issuers on a foreign exchange (which would not be even an “f-squared” action). Less certain, however, is the impact of the decision on the Securities Act of 1933 (the “1933 Act”) and Regulation S, which rule sets very demanding standards before a foreign offering will be considered exempt from the registration provisions of §5 of the 1933 Act. How much of Regulation S can survive Morrison?
The impact of Morrison on other federal statutes is also debatable. Already, one post-Morrison decision has relied on it to find that the RICO statute does not apply extraterritorially.3 This seems clearly correct, but closer questions remain when a foreign enterprise’s activities impact the United States. Finally, questions remain about the current scope of the SEC’s authority and also its ability to adopt rules that could give it (and private parties) the ability to reach transactions occurring on foreign exchanges or otherwise outside the United States.
1. The 1933 Act and Reg S
