미국 연방증권거래법 Section 10(b)에 기한 사적소송과 그 역외적용에 관한 고찰

Abstract

Section 10(b) of the Securities Exchange Act of 1934(Exchange Act) is one of the most popular anti-fraud provisions in the U.S. Section 10(b) makes it unlawful to use or employ any manipulative or deceptive device or contrivance in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered. Under this provision, the Securities and Exchange Commission (SEC) promulgated Rule 10b-5. Although the Exchange Act has no explicit provision regarding any civil liability for violation of Section 10(b), the courts have allowed injured investors to seek an implied private right of action under that provision. Class actions are commonly used for securities litigation because securities law violations often involves many claimants. Because of the high number of class action lawsuits in the U.S., corporations are exposed to huge financial risk. Section 10(b) could apply extraterritorially. In order to support the extraterritorial application of Section 10(b), U.S. courts developed the effects and conduct tests. Under the effects test, U.S. courts have subject matter jurisdiction when the transactions involve stock registered and listed on a national exchange, and are detrimental to the interests of American investors. Under the conduct test, U.S. courts have subject matter jurisdiction when the defendant's activities in the United States were more than merely preparatory to a securities fraud and these activities in the U.S. directly caused the claimed losses. A number of scholars and foreign entities criticized the effects and conduct tests because these tests were unpredictable and excessively broad. Recognizing these critiques, the U.S. Supreme Court in Morrison v. National Australia Bank Ltd. rejected the effects and conduct tests, and newly adopted the transactional test. Under the transactional test, Section 10(b) applies only to transactions in securities listed on domestic exchanges and domestic transactions in other securities. Right after Morrison, the　Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010(Dodd-Frank Act). In particular, Section 929Y of the Dodd-Frank Act directed the SEC　to conduct a study on extraterritorial private rights of action. To comply with Section 929Y, the SEC issued a report titled “Study on the Cross-Border Scope of the Private Right of Action Under Section 10(b) of the Securities Exchange Act of 1934.” In this report, the SEC provided six options for consideration. The options are divided into two categories: the options regarding the conduct and effects test, and the options to supplement and clarify the transactional test. The options to supplement and clarify the transactional test are more appropriate than the options regarding the conduct and effects test because of international comity concerns. Since the SEC's report was released, the Congress have never enacted any law regarding extraterritoriality of the private right of action under Section 10(b). Thus, the transactional test is the only standard that must be considered when determining the extraterritoriality of the private right of action under Section 10(b). Under the first prong of the transactional test, Section 10(b) applies only to transactions in securities listed on U.S. securities exchanges. Specifically, Section 10(b) applies to purchase or sale of ADRs(American Depository Receipts) or issuer's underlying common shares on a U.S. securities exchange. However, Section 10(b) does not apply to purchase or sale of ADRs or issuer’s underlying common shares within a foreign country. Under the second prong of the transactional test, Section 10(b) applies to U.S. domestic transactions in any securities that is not listed on a U.S. securities exchange. With regard to the second prong of the transactional test, it is questionable exactly when the transaction occurs. A district court held that Section 10(b) does not apply to a case where a purchase order for a security is placed in the U.S., but the order is excuted on a foreign exchange. Also, a circuit court held that the transaction is considered domestic if the parties incur irrevocable liability to carry out the transaction in the U.S. or if title is passed in the U.S. The transactional test is designed to limit the scope of extraterritorial application of Section 10(b). Despite the limits on the extraterritorial application of Section 10(b), Korean corporations can are still exposed to the litigation risk from U.S. securities class action because under transactional test Section 10(b) applies to the transactions in securities listed on domestic exchanges and domestic transactions in other securities. Under the transactional test, Korean corporations that list their common shares or ADRs on a U.S. securities exchange can still face U.S. securities litigation. Also, Korean corporations whose their underlying shares or ADRs trade on the U.S. over-the-counter market are still exposed to potential litigation risks from the U.S.