Anti-Fraud Law debated before the Supreme Court
Lawyers argued before the Supreme Court on whether a key provision of the Securities and Exchange Act should protect foreign fraud victims when the alleged scammer has a U.S. subsidiary. "This case has 'Australia' written all over it," Justice Ruth Bader Ginsburg said. The law's scope is pivotal, as courts increasingly face lawsuits over transnational fraud.
Three Australians who bought stock in National Australia Bank, the country's largest bank, filed a class action when the bank was forced to write down more than $1.75 billion on HomeSide Lending, a U.S. mortgage service provider the bank bought in 1998.
The bank had to sell the Florida-based subsidiary after HomeSide miscalculated how much revenue it would receive from mortgage-backed securities in 2001. Investors said the bank, HomeSide and four officers made false and misleading statements in SEC filings. When those statements were revealed in Australia, they allegedly caused the bank's stock price to plummet.
A final ruling is expected by late spring or early summer.
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Brian F. LaBovick, Esq.
Esther Uria LaBovick, Esq.
Mark R. Hanson, Esq.
Scott R. Haft, Esq.
Joseph R. Fields Jr., Esq.
Marcie Dodson, J.D.