As reported by a variety of news outlets, including the New York Times and Wall Street Journal, on January 29, a federal jury found French conglomerate Vivendi liable for securities fraud, setting the stage for a potential multi-billion dollar damages award. In 2008, the United States District Court for the Southern District of New York had made headlines in the same case when it decided to allow French, Dutch, and British investors to be included in the class. (See this July 31, 2008 CAB Article for a link to that order).
The verdict marks the end of the latest chapter in a battle over the viability of ”foreign-cubed” or “f-cubed” class actions–or securities fraud class actions alleging fraud by a foreign corporation, on foreign investors, involving securities traded on a foreign exchange. The Supreme Court recently granted certiorari in the case of Morrison v. National Australia Bank, Ltd., Docket No. 08-1191, in which it will address whether and under what circumstances foreign-cubed class actions may be brought under U.S. securities laws. (See this December 1, 2009 CAB Article for a discussion of the decision to grant certiorari and for links to prior developments in the case).
Stay tuned to ClassActionBlawg for future developments in the Vivendi and Morrison cases as well as other f-cubed cases.
Paul Karlsgodt
Raj Chohan
CAB Staff
Cases like this one could be a regular occurrence under Proposed Bill H.R. 3817. Under this Bill foreign companies could be sued more easily in U.S. courts.
The Investor Protection Act of 2009 (H.R. 3817), which was approved by the House financial services committee late last year, contains a provision to make it easier for investors to sue public companies in the U.S. even if they are based abroad and listed on overseas exchanges.
Section 215 of the proposed Act would in effect legislatively mandate a jurisdictional standard for extraterritoriality.
This was also the subject of an article in the International Business Law Advisor: What Do Halley’s Comet and “F-Cubed” Securities Class Action Trials Have in Common?
http://bit.ly/bWnohL
[...] trends in securities litigation in the latter part of the last decade was what became known as foreign-cubed (or “f-cubed”) class actions, securities fraud class actions filed on behalf of foreign investors against foreign companies [...]
[...] trends in securities litigation in the latter part of the last decade was what became known as foreign-cubed (or “f-cubed”) class actions, securities fraud class actions filed on behalf of foreign investors against foreign companies [...]