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Absolute Activist: The Second Circuit Clarifies the Territorial Limits of Section 10(B) in Private Lawsuits
2 March 2012
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The Second Circuit's Absolute Activist decision makes clear that transactions in securities not listed on a U.S. exchange are not subject to private section 10(b) liability, unless irrevocable liability is incurred or title passes in the U.S.
The Second Circuit found other U.S. connections to transnational securities transactions, such as the U.S. location of the broker or the issuer of the securities, insufficient to satisfy its test.
We expect further litigation in this area to continue to explore the territorial limits of section 10(b) under particular factual circumstances.
Paul R. Berger
Colby A. Smith
Jonathan R. Tuttle
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