In a recent case, the Second Circuit court decided that a Securities Exchange Act Section 10(b) action could be brought because the transaction at issue had sufficient connections to the United States to constitute a “domestic transaction.”   The action involved Bahamian and American plaintiffs bringing an action against a Bahamian company.  The company’s securities were not listed in the United States.  The Supreme Court standard established in the Morrison v. National Australia Bank Ltd. case held that Section 10(b) applies only to “transactions listed on domestic exchanges and domestic transactions in other securities.”  The Second Circuit based its conclusion on the fact that the plaintiffs became obligated to take and pay for the securities, and the securities were delivered in the United States.  Even though Bahamian regulatory approval was required for the issuance, the condition subsequent did not negate the fact that liability had been incurred in the United States.

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