Lower courts extend Morrison but SEC asserts Dodd‐Frank Act overrules Morrison for enforcement actions

Purpose – The purpose of this paper is to assess the effects of several lower court decisions, the enactment of the Dodd‐Frank Wall Street Reform & Consumer Protection Act of July 2010, and subsequent Securities and Exchange Commission statements on the extraterritorial application of Section 10 (b) of the Securities and Exchange Act of 1934, following the June 2010 US Supreme Court decision in Morrison v. National Australia Bank Ltd. Design/methodology/approach – The paper discusses the Morrison decision, three lower court decisions following Morrison, Section 929P(b) of the Dodd‐Frank Act, an October 2011 SEC release supporting the Second Circuit's long‐standing “conduct and effects” test, and other expert commentary, and draws interim conclusions, subject to further legal, regulatory and legislative proceedings, concerning the full impact of Morrison on US securities law. Findings – The full impact of Morrison on US securities law has yet to be seen and will be subject to regulations, legislation and court cases. The interim effect of the decisions issued by lower courts following Morrison is to provide foreign defendants with substantial immunity from private suit under US securities law over securities transactions that occur outside the USA. Originality/value – This paper provides a useful summary and practical guidance from experienced securities lawyers.