Securities Fraud Class Could Not Include Investors Who Purchased the Defendant Company’s Stock Outside of the U.S.

The World in U.S. Courts: Spring 2013 - Securities

In re SMART Technologies, Inc. Shareholder Litigation (U.S. District Court, S.D.N.Y., Jan. 11, 2013)

In this securities fraud class action under the Securities Act of 1933, the lead plaintiff sought to certify a class of all persons who purchased the defendant company’s stock pursuant to certain offering materials, which purportedly contained misrepresentations and omissions in violation of Securities Act of 1933. Although the court ultimately certified the class, it excluded from that class all investors who purchased the stock outside of the U.S. Based upon U.S. Supreme Court precedent holding that the Securities Exchange Act of 1934. does not apply extraterritorially, the court found that the 1933 Act likewise could not be applied extraterritorially. The court thus concluded that the class must be limited to persons who purchased the stock domestically.

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