Over the past decade, foreign investors have increasingly initiated securities fraud class actions against foreign companies in U.S. courts. These actions are often called “foreign-cubed” because they are brought in U.S. courts against foreign issuers on behalf of a class of foreign investors that purchased securities on foreign securities exchanges. Many of these purported class actions have raised interesting questions concerning the extraterritorial application of the U.S. securities laws—which are silent on the question of whether, and to what extent, their provisions apply to foreign conduct involving foreign defendants.
Over the past few months, there have been significant developments in three “foreign-cubed” cases that are pending in the Southern District of New York. First, in In re Vivendi Universal S.A. Securities Litigation, a jury returned a verdict in favor of U.S. and foreign shareholders from France, England, and the Netherlands who had alleged that Vivendi Universal, S.A., the French media conglomerate, made misrepresentations to the investing public in 2001 and 2002.1
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