Two recent decisions emanating from the Southern District of New York have extended the underlying logic of the Supreme Court’s landmark 2010 decision in Morrison v. National Australia Bank,1 which limited the extraterritorial reach of section 10(b) of the Securities Exchange Act of 1934, to claims brought under the Commodity Exchange Act.2 These decisions continue the trend among courts to interpret Morrison’s presumption against extraterritoriality broadly and extend its reach beyond section 10(b).
‘Transactional Test’
In Morrison, the Supreme Court limited the extraterritorial application of section 10(b) of the Securities Exchange Act (the Exchange Act), the primary antifraud provision of the federal securities laws. Under the bright-line "transactional test" articulated in Morrison, section 10(b) applies only in connection with the purchase or sale of a security listed on a domestic exchange or the domestic purchase or sale of any other security.
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