Plaintiffs cannot raise fraud claims under the Delaware Securities Act if the allegedly fraudulent transaction occurred outside of the state, even if both parties are Delaware corporations, the state Court of Chancery has ruled. The Chancery Court issued the opinion when it dismissed fraud claims related to the sale of Taiwan stock between two Delaware entities.
“The Delaware Securities Act ‘only applies where there is a sufficient nexus between Delaware and the transaction at issue,’” said Vice Chancellor John W. Noble in Eurofins Panlabs v. Ricerca Biosciences. “Furthermore, our Supreme Court explained that there is a presumption that a law, such as the Delaware Securities Act, is not intended to apply outside the territorial jurisdiction of the state in which it is enacted.”
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