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The Second Circuit Further Limits U.S. Securities Liability For Foreign Securities Transactions

May 13, 2014

By DOUGLAS H. FLAUM & SHAHZEB LARI

The Second Circuit recently ruled, as a matter of first impression, that Section 10(b) of the Securities Exchange Act does not apply to foreign securities transactions simply because the underlying securities are cross-listed on a United States exchange; and that the placement of a purchase order for foreign-issued securities in the United States does not alone constitute a domestic transaction subject to Section 10(b).