But I'm an American! A Text-Based Rationale for Dismissing F-Squared Securities Fraud Claims After Morrison v. National Australia Bank

This article proposes a novel analytical framework for assessing the scope of the antifraud provisions of the federal securities laws. In Morrison v. National Australia Bank Limited, the United States Supreme Court announced a new standard for determining whether a particular securities transaction is subject to Section 10(b) of the Securities Exchange Act of 1934. Although meant to be a bright-line rule, the Court’s new test has generated considerable uncertainty on account of its ambiguity. Consequently, courts applying Morrison often premise their holdings on the policy concerns underlying the test rather than on the text of the test itself. The article proposes a new interpretive framework for the Morrison Court’s transactional test. Specifically, the article argues that application of the test should not occur in a vacuum but must instead be informed by the text and legislative history of the Exchange Act. When placed in context, the transactional test reveals an intent to limit the scope of Section 10(b) to transactions occurring on domestic securities exchanges and in domestic over-the-counter markets. Although the proposed analysis arguably provides the simplest and most direct means for disposing of so called "f-squared" claims post-Morrison, its implications extend beyond the f-squared context.