U.S.Federal Courts Practice Of Extraterritorial Jurisdiction Over Securities And Its Inspiration To China

The extraterritorial jurisdiction of securities law originates in U.S.,and U.S.also has a long and rich history in securities development and regulation.Therefore,this article studies the practice of extraterritorial jurisdiction in securities law by U.S Federal Courts,and understands development history,and analysis of recent years of practice,with a view to providing relevant reference recommendations for the extraterritorial jurisdiction of Chinese securities lawsChapter one is an overview of extraterritorial jurisdiction in U.S.securities laws This chapter first clarifies the definition of extraterritorial jurisdiction,that is,the power of a country to formulate norms for people and affairs outside its jurisdiction and to implement them through domestic judicial and administrative organs.Then,the classification of extraterritorial jurisdiction is discussed.Secondly,in order to better understand the connotation of extraterritorial jurisdiction,the two groups of related concepts of legislative jurisdiction and subject matter jurisdiction,extraterritorial jurisdiction,extraterritorial validity,and extraterritorial application are analyzed to clarify the connections and differences between concepts.Finally,this chapter also analyzes the legal basis of extraterritorial jurisdiction in U.S.securities law,and discusses it from two perspectives:the basis of international law and the basis of domestic law.Chapter two is the development and evolution of extraterritorial jurisdiction in U.S securities laws.This chapter focuses on a detailed analysis of typical cases and their applicable standards in the development of extraterritorial jurisdiction in U.S..The Schoenbaum case establishes effect test and sets a precedent for judging whether securities cases have jurisdiction over matters by "effects".The Bersch case clarifies the "effects",according to the standards of the investor's nationality and residence,and combines whether a substantive and significant act occurs in U.S.and other situations summarizes a set of rules.The Leasco case established conduct test,"as long as a significant portion of the fraud occurred in U.S.,even if it did not affect U.S.,U.S.has jurisdiction." In the Itoba case,the court did not consider it necessary to apply the two standards separately.The combination of the two can better explain whether U.S.has enough intervention factors to justify the court's exercise of jurisdiction,thereby establishing the effect-conduct test.Until the Morrison case,the Federal Supreme Court held that the focus of securities law was not on the origin of fraud,but on securities trading in U.S.,which rejected previous standards and established transactional test.The Dodd-Frank Act,which was quickly promulgated,appeared to be a subversion of the Morrison judgment,but due to its ambiguity in semantics,fierce disputes have arisen between people who disagree on the issueChapter three is the practice of federal courts over the jurisdiction of securities law after the Dodd-Frank Act.This chapter searches and analyzes relevant U.S.securities cases from 2011 to now,and shows which standards the U.S.courts have relied on in cases involving jurisdiction outside the securities jurisdiction since the Dodd-Frank Act was enacted,and summarize the characteristics of federal courts' practice of extraterritorial jurisdiction over securities law.In terms of applicable standards,the Federal Court favors the transactional test established by the Supreme Court in the Morrison case;in terms of the types of plaintiffs,the litigation cases filed by the SEC account for almost half of the cases studied,and the court's always support the claims of SEC.According to the year of the case,although the transactional test are generally applicable,the relevant cases are basically judged three years after the establishment of the transactional test.In recent years,cases where the effect-conduct test has been applied have begun to appearChapter four is the conclusion and inspiration.This chapter will analyze the inspiration from three aspects.The first is the response to extraterritorial jurisdiction of U.S.securities law.For the response of federal court jurisdiction,investors must pay attention to the relief of U.S.domestic law and grasp the effect-conduct test and transactional test.For the enforcement jurisdiction of SEC,Chinese courts can take a non-cooperative approach and,if necessary,legislative organs can implement counteract legislation.Secondly,in terms of extraterritorial jurisdiction over Chinese securities laws,based on the differences in litigation systems between China and U.S.,it is not possible to simply imitate its extraterritorial jurisdiction model in securities laws.At the same time,extraterritorial jurisdiction may affect the sovereignty of other countries,so it needs to be treated with caution.Finally,when Chinese courts exercise extraterritorial jurisdiction in securities,they must strictly implement the jurisdiction of the case in accordance with existing laws,and be alert to inappropriate expansion of jurisdiction;at the same time,when dealing with related cases,they must pay attention to relevant decisions or rules made by the China Securities Regulatory Commission.