A UK nomad takes a US company public on the Alternative Investment M a rket (AIM) and is sued in the US by an investor under the anti-fraud provisions of Section 10(b) of the US Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In the complaint, the investor alleges that the admission document failed to include an expert’s warning that the oil exploration project might result in a dry well. Has this ever happened? Not to the best of the author’s knowledge. Could it happen? It absolutely could.
US courts of the third, eighth and ninth circuits have assumed jurisdiction in a variety of Section 10(b) cases involving non-US plaintiffs suing US companies and non-US companies in connection with the sale of securities not listed on any US securities exchange, where the sales took place outside of the US.
