Second Circuit Rejects 'Listing Theory' for Foreign Securities; Applies Morrison

Bloomberg BNA
May 13, 2014

Ira A. Schochet comments on the recent Second Circuit ruling that rejects listing theory for foreign-issued securities

''[T]his is just one more instance in which the courts have closed the courthouse door to Americans who otherwise have meritorious claims resulting from damages they incurred from securities fraud,'' said Ira Schochet, a partner at Labaton Sucharow with extensive experience in securities class actions.

Furthermore, ''from the perspective of the investor, it's mere happenstance on which exchange, foreign or domestic, the order is executed,'' Schochet said, potentially making it difficult for investors to predict what legal regime will govern the transaction.