Pomerantz Spearheads Efforts to Roll Back Morrison Decision Damage
As previously reported by the Monitor, the Supreme Court’s recent ruling in Morrison v. National Australia Bank Ltd., has sounded the death knell for the securities fraud claims of thousands of institutional investors who purchased securities on non-U.S. exchanges. This ruling bars not only claims against foreign companies, but those against U.S. companies as well, if their stock is listed on overseas exchanges. For example, if Goldman Sachs, a U.S. company with headquarters in New York, issued materially false and misleading financial statements in New York, investors who bought Goldman stock on the NYSE would be able to participate in a federal securities class action, but those who bought Goldman shares on the London Stock Exchange would be excluded.
Pomerantz has actively taken steps both on the legislative and judicial front to repeal or limit Morrison. On the legislative front, pursuant to the Dodd-Frank Act, the SEC has requested comments from the public as to whether it should recommend to Congress that the ruling should be overruled or limited by Congress. Pomerantz submitted a letter to the SEC on behalf of nearly a dozen prominent international institutional investors, urging it to recommend that Congress overturn the decision through legislation. Pomerantz also met with representatives of the Israel Securities Authority (“ISA”) to urge it to voice its opposition to Morrison. The ISA submitted an opinion letter arguing that securities listed under Israel’s dual-listed regime, which allows U.S. listed companies to automatically list on the Tel Aviv Stock Exchange (“TASE”) without any additional reporting requirements, should be excepted from Morrison’s ruling.
Pomerantz is also actively seeking a judicial remedy to Morrison through the courts. In the Perrigo Co. securities litigation, Pomerantz represents four Israeli institutional investors. Perrigo is listed on both NASDAQ and the TASE. Defendants sought to dismiss Plaintiffs’ claims, arguing that under Morrison, their purchases of Perrigo shares on the TASE precluded their participation in the action. Pomerantz argued that given that such common shares were listed both on the NASDAQ and the TASE, they fell within the requirements set forth in Morrison. Pomerantz further argued that given the ISA’s stance that such dual listed securities should be included in federal securities class actions, the concerns of international comity guiding the Supreme Court’s decision were not applicable.
Pomerantz will continue to vigorously fight for international investors’ rights under the U.S. securities laws.
