{"id":5442,"date":"2013-05-21T00:00:00","date_gmt":"2013-05-21T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2013\/05\/dismissal_of_44m_international"},"modified":"2022-03-10T16:36:01","modified_gmt":"2022-03-10T22:36:01","slug":"dismissal-of-44m-international","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/dismissal-of-44m-international\/","title":{"rendered":"Dismissal of $44M International Boiler Room Scam Claims Raises Issue of SEC Extraterritorial Enforcement Authority"},"content":{"rendered":"\n

Pointing to the US Supreme Court\u2019s ruling in Morrison v. National Australia Bank Ltd.<\/em>, the U.S. District Court for the Northern District of Illinois dismissed the SEC\u2019s allegations that a group of entities and persons violated broker-dealer registration requirements in an alleged $44 million international boiler room scam. The broker fraud case is SEC v. Benger<\/em>.<\/p>\n

Claiming the transactions were extraterritorial and not within the scope of the regulator\u2019s reach, defendants sought summary judgment even though a lot of the allegedly fraudulent activity is said to have happened in the US. The district court, however, found that investors became irrevocably bound in their countries upon submission of buying offers even though they turned those offers in to escrow agents in this country. Moreover, the issuer became irrevocably bound in Brazil when accepting the purchase offers, and when the sale went through the titled passed either there or the countries where investors got the stock certificates regardless that the agents that served as middlemen were located here.<\/p>\n

In Morrison<\/em>, the Supreme Court determined that the 1934 Securities Exchange Act\u2019s key federal securities antifraud provision is only applicable to securities transactions that can either be found on U.S. exchanges or that took place domestically. Following that decision, and seeking to give back exterritorial reach to both Justice Department and the SEC, Congress issued the Dodd-Frank Wall Street Reform and Consumer Protection Act\u2019s Section 929P, which gives federal courts jurisdiction over enforcement actions involving conduct that took place in the US that played a part in significantly furthering a violation\/behavior taking place abroad that will have a likely effect domestically.<\/p>\n

Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

Pointing to the US Supreme Court\u2019s ruling in Morrison v. National Australia Bank Ltd., the U.S. District Court for the Northern District of Illinois dismissed the SEC\u2019s allegations that a group of entities and persons violated broker-dealer registration requirements in an alleged $44 million international boiler room scam. The broker fraud case is SEC v. […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3741],"tags":[],"class_list":["post-5442","post","type-post","status-publish","format-standard","hentry","category-securities-fraud"],"yoast_head":"\nDismissal of $44M International Boiler Room Scam Claims Raises Issue of SEC Extraterritorial Enforcement Authority — Investor Lawyers Blog — May 21, 2013<\/title>\n<meta name=\"description\" content=\"Pointing to the US Supreme Court\u2019s ruling in Morrison v. 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