The Supreme Court indicated Monday it could prohibit foreign investors from using U.S. securities law and American courts to sue a foreign bank for fraud.
The court heard argument in a challenge from Australian investors who want to sue the Melbourne-based National Australia Bank for securities fraud in U.S. federal court. The investors say they should have access to American courts because the claim of fraud relies on the actions of a bank-owned mortgage servicing company in Florida.
But none of the justices appeared to accept the investors' argument.
"Australian plaintiffs, Australian defendants, shares purchased in Australia. It has Australia written all over it," Justice Ruth Bader Ginsburg said. "Isn't the most appropriate choice the law of Australia rather than the law of United States?"
The court could use the case to clarify whether and when disputes over international dealings can be resolved in American courts, which often are more generous to plaintiffs than foreign courts.
Business interests and the governments of Australia, France and Great Britain are urging the court rule in favor of the bank.