Extraterritorial Application of National Securities Regulation of National Securities Regulation: the Case of Rule 10b-5 and Morrison v National Australia Bank Ltd

The issue of legal jurisdiction is considered an integral part of sovereignty and one in which States naturally assume responsibility to adjudicate on matters and persons within their territorial boundaries. Except by mutual consent, no State is allowed to undermine the sovereign authority of another by enacting and applying its laws to matters and persons within the jurisdiction of that other State except in circumstances permitted under conflict of law principles. However, global expansion of commerce, flourishing of multinational corporations, and technological revolution, has not only increased international transaction in securities, but also market abuses, fraud and manipulative conduct associated with domestic securities markets have spread across borders. So, instead of jurisdiction based on conventional principles, a State justify extraterritorial application of its national securities regulation if the abusive, fraudulent or manipulative conduct of foreign persons imposes negative externalities on the State, its economy, and investors. This dissertation considers the impact of the United States decision to apply in other countries, Rule 10b-5 - securities antifraud legislation promulgated under Section 10(b) of the Securities Exchange Act of 1934.