This month the SEC published its Study on the Cross-Border Scope of the Private Right of Action Under Section 10(b) of the Securities Exchange Act of 1934 a 108 page report about investors 10(b) cause of action since the Morrison case. Because Morrison limited investors claims based on the location of the purchase of the underlying investments, the chilling effect on this antifraud provision has been pronounced. This SEC report was requested by Congress and mandated in the same Dodd Frank provision that came out to preserve the scope of SEC and DoJ power under the Act after the Morrison Case.
Although the report acknowleges from the outset that "meritorious private actions have long been recognized as an important supplement to civil and criminal law-enforcement actions." The voluminous paper fails crucially to make official recommendations for Congress to extend to investors and private litigants the same language that was set to minimize Morrison's impact on the SEC and the DoJ in Section 929P of the Dodd Frank Act. This didn't sit well with the commissioner.
As discussed by the D&O Diary , commissioner Luis Aguilar filed a dissenting statement with the report, in which he expresses his "strong disappointment that the study fails to satisfactorily answer the Congressional request, contains no specific recommendations, and does not portray a complete picture of the immense and irreparable investor harm that resulted and that will continue to result due to Morrison v. National Australia Bank, Ltd."
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