Author Yuliya Guseva in her paper titled “The SEC and Foreign Private Issuers: A Path to Optimal Enforcement,” reviews SEC enforcement actions against foreign private issuers between 2005 and 2016 and considers developments following the Supreme Court’s Morrison decision.  Guseva notes that following Morrison, federal courts have narrowed the application of Exchange Act Section 10 to instances involving securities listed on US exchanges and domestic transaction wherein either title to the securities passes in the United States or the parties become irrevocably bound to purchase the securities in the United States.   It is unclear how courts will react to the Tenth Circuit decision in Traffic Monsoon.  In the immediate aftermath of Morrison, the author notes a decline in the number of class actions filed against foreign issuers.  Guseva also looks at SEC proceedings in the five years before and roughly five years since the Morrison decision.  During this period, there were 151 actions brought against foreign issuers.  Approximately 8% of these involved Exchange Act Section 10(b) and Securities Act Section 17 violations, and delinquent filing violations accounted for 77% of the actions brought.  During this time period, the SEC may have referred to foreign regulators’ enforcement matters, which would not be reflected in the statistics cited in the paper and above.

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