While judicial ink has long been spilled on the extraterritoriality of the securities laws, growing attention is being paid to the overseas reach of the antifraud provisions of the Commodity Exchange Act (CEA). In September, a divided panel of the U.S. Court of Appeals for the Second Circuit addressed the law’s extraterritoriality in Loginovskaya v. Batratchenko, with potentially far-reaching implications for private actions and government enforcement under the CEA, and perhaps other statutory schemes as well.
Ludmila Loginovskaya, a Russian citizen living in Russia, invested with the Thor Group, which in turn manages investments in commodity futures and real estate. Although Loginovskaya initially received account statements showing positive returns, the Thor Group allegedly drained her accounts and failed to return her money upon request. Loginovskaya brought a private action in the Southern District of New York, alleging that the Thor Group (together with its various executives and affiliates, whom we will collectively call Thor) violated the CEA by making fraudulent misrepresentations.
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