In United States v. Vilar,1 the U.S. Court of Appeals for the Second Circuit held that the presumption against extraterritoriality, which the Supreme Court applied to civil actions under the federal securities fraud statute in Morrison v. National Australia Bank, 2 applied equally in criminal cases. Rejecting the government’s argument that the presumption did not apply “in the criminal context,” the Second Circuit ruled that “a defendant may be convicted of securities fraud under Section 10(b) and Rule 10b-5 only if he has engaged in fraud in connection with (1) a security listed on a U.S. exchange, or (2) a security purchased or sold in the United States.”3 Nevertheless, the court upheld the defendants’ convictions in light of evidence that they had also “engaged in fraud in connection with a domestic purchase or sale of securities.”4
At the same time that it applied the presumption against extraterritoriality in the criminal context, the Second Circuit emphasized that “the same rule of interpretation should not be applied to criminal statutes which are, as a class, not logically dependent on their locality for the Government’s jurisdiction, but are enacted because of the right of the Government to defend itself against obstruction, or fraud wherever perpetrated.”5 This principle, articulated by the Supreme Court nearly a century ago in United States v. Bowman,6 has long guided courts considering the extraterritorial reach of criminal statutes. While Morrison and its progeny may generally curtail the reach of federal laws, it remains to be seen whether the Second Circuit’s affirmation of Bowman in Vilar will place a limit on the class of criminal laws to which Morrison will apply. The potential impact of Vilar on several criminal laws familiar to white-collar practitioners is considered below.
