The US Congress is currently considering financial reform legislation on investor protection which will give the Securities and Exchange Commission additional powers to protect investors and enhance the extraterritorial jurisdiction of US securities laws, making it easier to sue foreign companies under those laws. The statutory language of US securities laws does not provide clear guidance as to jurisdiction over extraterritorial conduct and so US courts have developed tests for establishing jurisdiction in these cases. The US Supreme Court has recently agreed to hear an appeal in a case involving issues of extraterritorial jurisdiction related to claims under US securities laws by foreign investors against a foreign issuer based on securities transactions in foreign countries. It is currently unclear whether any decision by the US Supreme Court will bring clarity to this jurisdictional issue or how it will affect this pending financial reform legislation.
A briefing note on this issue is available here.
