Christopher Robertson and Erik Weibust Published in The Hedge Fund Law Report
“Update: Are There Still Avenues for Recovery in United States Courts for Overseas Hedge Fund Losses After Morrison v. National Australia Bank Ltd.?”

Christopher Robertson and Erik Weibust’s article, “Update: Are There Still Avenues for Recovery in United States Courts for Overseas Hedge Fund Losses After Morrison v. National Australia Bank Ltd.?” was published in the July 2010 edition of The Hedge Fund Law Report. This article is a follow up to Chris and Erik's article, “Are There Avenues for Recovery in United States Courts for Overseas Hedge Fund Losses,” published July 23, 2009, also in The Hedge Fund Law Report, in which they first wrote about the ability of U.S-based hedge funds to sue foreign corporations in U.S. courts for violations of the antifraud provisions of the U.S. securities laws. The authors opined that, under precedents at that time, the U.S. federal courts would likely apply the antifraud provisions of the U.S. securities laws to a lawsuit involving the purchase or sale of shares of a foreign company on a foreign exchange, provided American investors were affected by the foreign company’s wrongful acts.

In their recent article, Chris and Erik discuss how things have changed in just one year. To describe the change, the authors point to the United States Supreme Court ruling in Morrison v. National Australia Bank Ltd, in which the court found that the principal antifraud provisions of the U.S. securities laws do not have extraterritorial reach and do not apply to foreign companies whose shares trade solely on foreign exchanges. Chris and Erik note that “the Court’s opinion appears to have a broad reach and does not distinguish between foreign and American plaintiffs." They continue on to explain how the Morrison decision sets aside decades of Court of Appeals' precedent. Chris and Erik conclude that in spite of  “the Morrison decision, investors harmed in overseas transactions, including hedge funds, will continue to look for avenues through the U.S. courts to redress their losses.”